8-KMaterial AgreementsFinancial EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Jul 21, 2017)

Filed July 21, 2017For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) has announced a significant financing event through its subsidiary, Digital Stout Holding, LLC. The company successfully issued and sold £250 million in aggregate principal amount of 2.750% Guaranteed Notes due 2024 and £350 million in aggregate principal amount of 3.300% Guaranteed Notes due 2029. These notes are senior unsecured obligations and are fully guaranteed by DLR and its operating partnership, DLR, L.P. The net proceeds of approximately £593.8 million are primarily intended to fund a portion of the repayment, redemption, and/or discharge of debt related to the previously announced merger with DuPont Fabros Technology, Inc. (DFT), as well as associated transaction fees and expenses. This issuance represents a strategic move by DLR to secure capital for a major acquisition. The proceeds are earmarked for a key component of the DFT merger integration, demonstrating the company's proactive approach to financing its growth initiatives. Investors should note the maturity dates and interest rates of the new notes, as well as the covenants and potential special redemption events tied to the DFT merger's consummation. The offering was conducted outside the United States under Regulation S, meaning the notes have not been registered with the SEC and are not offered to U.S. persons.

Key Highlights

  • 1Digital Stout Holding, LLC issued £250 million of 2.750% Guaranteed Notes due 2024 and £350 million of 3.300% Guaranteed Notes due 2029.
  • 2Total proceeds raised from the offering amount to approximately £593.8 million.
  • 3The primary use of proceeds is to finance the repayment of debt and transaction expenses related to the pending merger with DuPont Fabros Technology, Inc. (DFT).
  • 4The notes are senior unsecured obligations of Digital Stout Holding, LLC, fully and unconditionally guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P.
  • 5The offering was conducted outside the United States in reliance on Regulation S.
  • 6The indentures include restrictive covenants on incurring additional indebtedness and maintaining unencumbered assets.
  • 7A special mandatory redemption event for the 2024 Notes is triggered if the DFT Merger is not consummated by December 15, 2017, or if the merger agreement is terminated.

Frequently Asked Questions

The primary purpose of issuing these new notes is to raise capital to fund a portion of the repayment, redemption, and/or discharge of debt associated with the acquisition of DuPont Fabros Technology, Inc. (DFT), as well as to cover related transaction fees and expenses.

The notes are issued by Digital Stout Holding, LLC, a subsidiary of Digital Realty Trust, L.P. They are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P., meaning the parent companies are responsible for payment obligations if the subsidiary defaults.

No, these notes were sold outside the United States under Regulation S of the Securities Act of 1933. They have not been registered with the SEC and may not be offered or sold within the United States or to U.S. persons, absent registration or an applicable exemption.

If the DFT merger is not completed by December 15, 2017, or if the merger agreement is terminated before that date, all outstanding 2024 Notes will be subject to a special mandatory redemption at a price of 101% of their principal amount, plus accrued interest.