Summary
Digital Realty Trust, Inc. (DLR) filed an 8-K on August 24, 2015, reporting the completion of an underwritten public offering of its Series I Cumulative Redeemable Preferred Stock. The company issued 10,000,000 shares, raising approximately $240.9 million in net proceeds after deducting underwriting discounts and expenses. These proceeds are earmarked to fund a portion of the acquisition of Telx Holdings, Inc., with temporary placement of funds into the company's operating partnership pending the acquisition's closing. This filing also details the terms of the Series I Preferred Stock, including its dividend rate of 6.350% per annum, its senior ranking to common stock regarding dividends and liquidation, and its parity with existing preferred stock series. Key provisions include redemption rights for DLR after August 24, 2020, or upon a change of control, and conversion rights for holders into DLR's common stock under certain change of control scenarios, capped at a specific ratio to protect against dilution.
Key Highlights
- 1Completion of a public offering for 10,000,000 shares of 6.350% Series I Cumulative Redeemable Preferred Stock.
- 2Net proceeds of approximately $240.9 million raised from the offering.
- 3Proceeds are intended to partially fund the acquisition of Telx Holdings, Inc.
- 4Series I Preferred Stock pays a cumulative dividend of 6.350% per annum ($1.5875 per share) on a $25.00 liquidation preference.
- 5The Series I Preferred Stock ranks senior to common stock for dividends and liquidation, and on parity with existing preferred stock series (E, F, G, H).
- 6DLR has the option to redeem the Series I Preferred Stock on or after August 24, 2020, or upon a Change of Control event.
- 7Holders of Series I Preferred Stock have a conversion right into DLR's common stock upon a Change of Control, subject to certain conditions and a 'Share Cap' limitation.