8-KMaterial AgreementsFinancial EventsOther Events+1

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Jun 23, 2015)

Filed June 23, 2015For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) reported on June 23, 2015, the completion of an underwritten public offering of $500.0 million in aggregate principal amount of 3.950% Notes due 2022. These notes are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and are unsecured senior obligations of Digital Realty Trust, L.P., ranking equally with other unsecured senior indebtedness. This offering provides DLR with additional capital, which can be used for various corporate purposes, including potential acquisitions, development projects, or refinancing existing debt. Investors should note that while these notes are senior unsecured obligations of the L.P., they are effectively subordinated to any secured indebtedness and to the liabilities of DLR's subsidiaries. The indenture includes restrictive covenants related to incurring additional debt and maintaining unencumbered assets, which are standard for such debt issuances.

Key Highlights

  • 1Completion of a $500 million public offering of 3.950% Notes due 2022 by Digital Realty Trust, L.P.
  • 2Digital Realty Trust, Inc. fully and unconditionally guarantees the Notes.
  • 3The Notes are general unsecured senior obligations of Digital Realty Trust, L.P.
  • 4The offering was made pursuant to an effective shelf registration statement filed on April 20, 2015.
  • 5The indenture includes covenants limiting additional indebtedness and requiring maintenance of unencumbered assets.
  • 6The Notes are redeemable at the company's option prior to maturity, subject to a make-whole premium before May 1, 2022.
  • 7Events of default, including payment defaults, breaches of covenants, and bankruptcy events, can lead to accelerated maturity of the Notes.

Frequently Asked Questions

This 8-K filing announces the completion of Digital Realty Trust, L.P.'s underwritten public offering of $500.0 million of 3.950% Notes due 2022, which are guaranteed by Digital Realty Trust, Inc. It details the terms of the notes, the governing indentures, and related agreements.

The Notes have a principal amount of $500 million, mature on July 1, 2022, and bear a fixed interest rate of 3.950% per annum, payable semi-annually. They were issued at a discount to par (99.236% of principal amount). The Notes are unsecured senior obligations of Digital Realty Trust, L.P., guaranteed by Digital Realty Trust, Inc.

Being unsecured means the Notes are not backed by specific collateral. 'Effectively subordinated' means that in the event of bankruptcy or liquidation, holders of secured debt and creditors of Digital Realty Trust, L.P.'s subsidiaries would have a prior claim to assets over the holders of these Notes.

The indenture contains restrictive covenants that limit Digital Realty Trust's ability to incur additional indebtedness and require the company to maintain a pool of unencumbered assets. These covenants are designed to protect the interests of noteholders by managing the company's leverage and asset base.