8-KOther EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Corporate Update (May 20, 2016)

Filed May 20, 2016For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) announced on May 16, 2016, that it entered into agreements for the forward issuance and sale of 12,500,000 shares of its common stock at a public offering price of $96.00 per share. These agreements include forward sale agreements with major financial institutions (Bank of America, N.A., Citibank, N.A., and JPMorgan Chase Bank, N.A., London Branch) as forward purchasers, and an underwriting agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., and J.P. Morgan Securities LLC as underwriters. The company intends to deliver these shares to the forward purchasers on or before May 19, 2017, in exchange for cash proceeds. This transaction is structured to allow DLR to receive the net proceeds from the offering, adjusted for underwriting discounts, and provides flexibility regarding the settlement date. An option for underwriters to purchase up to an additional 1,875,000 shares was also granted, potentially increasing the total number of shares issued.

Key Highlights

  • 1Digital Realty Trust (DLR) announced a forward issuance and sale of 12,500,000 shares of common stock.
  • 2The public offering price was set at $96.00 per share.
  • 3The transaction involves forward sale agreements with Bank of America, Citibank, and JPMorgan Chase Bank.
  • 4The company intends to physically settle these agreements by May 19, 2017, receiving cash proceeds.
  • 5Underwriters have an option to purchase up to an additional 1,875,000 shares.
  • 6The offering is being conducted under an effective shelf registration statement.
  • 7This transaction is designed to raise capital while offering flexibility in settlement.

Frequently Asked Questions

The forward sale agreements allow Digital Realty Trust to secure the proceeds from selling 12,500,000 shares of its common stock at a set price, with the actual delivery of shares and receipt of cash to occur at a future date, on or before May 19, 2017. This structure provides the company with capital while offering flexibility and potentially favorable settlement terms.

The company intends to deliver the shares to the forward purchasers and receive the cash proceeds upon physical settlement of the forward sale agreements, which is expected to occur on one or more dates specified by Digital Realty Trust, no later than May 19, 2017. The exact timing is at the company's discretion within that window.

The underwriters have an option to purchase up to an additional 1,875,000 shares. If this option is exercised, it would increase the total number of shares issued and sold by Digital Realty Trust and increase the capital raised. The shares underlying the forward sale agreements would also be increased accordingly.

The initial offering is for 12,500,000 shares. If the underwriters exercise their option, an additional 1,875,000 shares could be issued, leading to a total issuance of up to 14,375,000 shares. This increase in outstanding shares could lead to dilution for existing shareholders.