8-KFinancial Events

DIGITAL REALTY TRUST, INC. 8-K Report, Financial Obligation (Aug 19, 2013)

Filed August 19, 2013For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K on August 18, 2013, reporting significant updates to its debt facilities as of August 15, 2013. The company replaced its $1.5 billion revolving credit facility with a new $2.0 billion unsecured global revolving credit facility, maturing in November 2017 with extension options. This new facility allows for multi-currency borrowings and provides flexibility to increase the total commitment to $2.55 billion. Additionally, DLR amended its existing term loan agreement, increasing the senior unsecured term loan facility from $750 million to $1.0 billion, also with a maturity in April 2017 and added extension options. The company also amended its Prudential shelf facility to align its restrictive and financial covenants with the new credit and term loan agreements. These changes indicate DLR's proactive management of its capital structure to support ongoing operations and potential growth.

Key Highlights

  • 1Digital Realty Trust, Inc. (DLR) entered into a new $2.0 billion unsecured global revolving credit facility, replacing a previous $1.5 billion facility.
  • 2The new revolving credit facility matures in November 2017 and includes two six-month extension options.
  • 3The facility allows for borrowings in multiple currencies (AUD, GBP, CAD, EUR, HKD, JPY, MXN, SGD, CHF, USD) and can be increased up to $2.55 billion.
  • 4DLR amended its term loan agreement to increase the senior unsecured term loan facility from $750 million to $1.0 billion.
  • 5The term loan facility also matures in April 2017 and now includes two six-month extension options, with an ability to increase the facility to $1.1 billion.
  • 6Restrictive covenants on both the revolving credit facility and term loan agreement were modified, including the deletion of the tangible net worth covenant and a reduction in the capitalization rate for data center assets.
  • 7Amendments were made to the Prudential shelf facility to harmonize its covenants with the new credit and term loan agreements.

Frequently Asked Questions

This filing primarily informs investors about significant updates to Digital Realty Trust's debt financing arrangements. Specifically, it details the establishment of a larger global revolving credit facility and an increase in the size of its term loan facility, along with amendments to align covenants across its debt instruments.

Digital Realty has significantly increased its borrowing capacity. The revolving credit facility grew from $1.5 billion to $2.0 billion, with an option to increase it further to $2.55 billion. The term loan facility was also expanded from $750 million to $1.0 billion, with a potential increase to $1.1 billion.

Several restrictive and financial covenants were modified. Notably, the tangible net worth covenant was deleted, and the capitalization rate applied to data center assets was reduced from 8.25% to 8.00%. These changes provide more flexibility in managing the company's balance sheet and operations.

The new global revolving credit facility matures in November 2017 (with extension options), and the amended term loan matures in April 2017 (also with extension options). Both facilities offer flexibility for borrowing in various international currencies, including Australian Dollars, British Pounds Sterling, Euros, Hong Kong Dollars, Japanese Yen, Mexican Pesos, Singapore Dollars, Swiss Francs, and US Dollars, with the potential to add more currencies.