8-KOther Events

DIGITAL REALTY TRUST, INC. 8-K Report, Corporate Update (Jul 12, 2017)

Filed July 12, 2017For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) announced on July 12, 2017, the pricing of a significant debt offering, raising a total of £600 million. This includes £250 million in 2.750% Guaranteed Notes due 2024 and £350 million in 3.300% Guaranteed Notes due 2029. These notes are senior unsecured obligations of its subsidiary, Digital Stout Holding, LLC, and are fully guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P. The primary purpose of these proceeds is to finance a portion of the debt repayment, redemption, and related transaction fees associated with the previously announced merger with DuPont Fabros Technology, Inc. (DFT). Any excess proceeds will be used for general corporate purposes, including debt reduction under their revolving credit facility, property acquisitions, development, and potentially other debt or equity retirements. This offering demonstrates DLR's proactive financing strategy to support its strategic growth initiatives, particularly the integration of DFT.

Key Highlights

  • 1Digital Realty Trust (DLR) priced an offering of £600 million in senior unsecured notes.
  • 2The offering consists of two tranches: £250 million in 2.750% Guaranteed Notes due 2024 and £350 million in 3.300% Guaranteed Notes due 2029.
  • 3The notes are guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P.
  • 4Proceeds are earmarked to fund debt repayment and transaction expenses related to the DuPont Fabros Technology (DFT) merger.
  • 5Excess proceeds may be used for general corporate purposes, including repaying revolving credit facility debt, acquisitions, development, or retiring other debt/equity.
  • 6The offering is being conducted outside the United States under Regulation S and has not been registered under the U.S. Securities Act.
  • 7Settlement for the offering is expected on July 21, 2017, subject to customary closing conditions.

Frequently Asked Questions

Digital Realty is issuing a total of £600 million in aggregate principal amount of guaranteed notes. This is comprised of £250 million of 2.750% Guaranteed Notes due 2024 and £350 million of 3.300% Guaranteed Notes due 2029.

The primary use of the net proceeds from the 2024 Notes is to fund a portion of the repayment, redemption, and discharge of debt related to the DFT Merger, along with associated transaction fees and expenses. Proceeds from the 2029 Notes are intended for temporary repayment of borrowings under the company's global revolving credit facility, potential acquisitions, development funding, and other general corporate purposes. Any excess proceeds from the 2024 Notes will also be used for general corporate purposes.

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

The DFT Merger refers to Digital Realty Trust's agreement to merge with DuPont Fabros Technology, Inc. (DFT). The proceeds from the note offering are partly intended to finance the costs associated with this significant merger, which is a key strategic initiative for Digital Realty.