8-KMaterial AgreementsFinancial EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Jan 25, 2013)

Filed January 25, 2013For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

This Form 8-K filing by Digital Realty Trust, Inc. (DLR) reports on a significant financing event that occurred on January 18, 2013. The company's wholly-owned subsidiary, Digital Stout Holding, LLC, successfully issued and sold £400 million aggregate principal amount of 4.250% Guaranteed Notes due 2025. These notes are senior unsecured obligations, fully and unconditionally guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P., and were sold outside the United States under Regulation S. The net proceeds of approximately £393.3 million are intended for strategic uses including repaying revolving credit facility borrowings, property acquisitions, development funding, and general working capital. Investors should note the terms of the indenture, which include restrictive covenants on incurring additional indebtedness and requirements for maintaining unencumbered assets. The filing also details the redemption provisions, including a make-whole premium, and specifies events of default that could lead to accelerated maturity. The notes are subject to U.S. withholding tax, with provisions for "additional amounts" to be paid under certain circumstances, ensuring net payments to non-U.S. persons are not less than originally intended.

Key Highlights

  • 1Digital Stout Holding, LLC, a subsidiary of DLR, issued £400 million in 4.250% Guaranteed Notes due January 17, 2025.
  • 2The notes are senior unsecured obligations and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P.
  • 3The offering was conducted outside the United States under Regulation S, with notes not registered under the U.S. Securities Act.
  • 4Net proceeds of approximately £393.3 million will be used for debt repayment, property acquisitions, development, and working capital.
  • 5The indenture includes covenants restricting additional indebtedness and requiring maintenance of unencumbered assets.
  • 6Notes can be redeemed by the issuer at par plus a make-whole premium, with exceptions for redemptions near maturity.
  • 7Provisions exist for 'additional amounts' to be paid to non-U.S. holders if U.S. withholding taxes are imposed.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the entry into a material definitive agreement, specifically the issuance and sale of £400 million in 4.250% Guaranteed Notes due 2025 by Digital Stout Holding, LLC, a subsidiary of Digital Realty Trust, Inc.

The net proceeds of approximately £393.3 million are intended for several strategic purposes, including temporarily repaying borrowings under the company's global revolving credit facility, acquiring additional properties, funding development and redevelopment opportunities, and for general working capital purposes, or a combination thereof.

No, the notes were sold outside the United States in reliance on Regulation S under the Securities Act of 1933. They have not been registered under the Securities Act and may not be offered or sold within the United States or to U.S. persons absent registration or an applicable exemption.

The notes bear a 4.250% annual interest rate, mature on January 17, 2025, and are guaranteed by the parent companies. The indenture contains covenants limiting additional indebtedness and requiring unencumbered assets. Noteholders benefit from provisions for redemption and 'additional amounts' to mitigate U.S. withholding taxes for non-U.S. holders. Events of default can lead to accelerated maturity.