8-KOther EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Corporate Update (May 23, 2017)

Filed May 23, 2017For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) announced on May 23, 2017, the successful settlement of its forward sale agreements. The company issued approximately 2.375 million shares of common stock, generating net proceeds of about $211 million. This action effectively concludes the forward sale agreements initiated in May 2016, providing the company with significant capital. In a separate transaction, a wholly-owned indirect finance subsidiary, Digital Euro Finco, LLC, issued and sold €125 million of Floating Rate Guaranteed Notes due 2019 in a private placement outside the United States. These notes carry a variable interest rate tied to three-month EURIBOR plus a 0.50% margin. The net proceeds of approximately €124.6 million are intended for temporary repayment of borrowings under the company's revolving credit facility and for general corporate purposes, indicating prudent capital management and operational flexibility.

Key Highlights

  • 1Settled forward sale agreements by issuing 2.375 million shares of common stock for approximately $211 million in net proceeds.
  • 2Successfully concluded forward sale agreements that were originally entered into in May 2016.
  • 3Finance subsidiary, Digital Euro Finco, LLC, issued €125 million in Floating Rate Guaranteed Notes due 2019.
  • 4Notes bear interest at three-month EURIBOR plus 0.50%, resetting quarterly.
  • 5Initial interest rate for the Notes is 0.169%.
  • 6Net proceeds from the Notes offering are approximately €124.6 million.
  • 7Proceeds from the Notes will be used to temporarily reduce borrowings under the global revolving credit facility and for general corporate purposes.

Frequently Asked Questions

The forward sale agreements, entered into in May 2016, were settled by issuing new shares. This provided Digital Realty Trust with approximately $211 million in net proceeds, which can be used for general corporate purposes and to strengthen its financial position.

Digital Euro Finco, LLC issued €125 million of these notes. They are senior unsecured obligations, guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P. The notes bear interest at a floating rate of three-month EURIBOR plus 0.50%, resetting quarterly. They were sold privately outside the United States and will mature in 2019.

The net proceeds of approximately €124.6 million are intended for the temporary repayment of borrowings under the company's global revolving credit facility and for general corporate purposes. This suggests a strategy to manage short-term debt and maintain liquidity.

No, the Notes were sold outside the United States in reliance on Regulation S and have not been registered under the Securities Act of 1933. They may not be offered or sold within the United States or to U.S. persons without registration or an applicable exemption.