8-KMaterial AgreementsFinancial EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Oct 18, 2018)

Filed October 18, 2018For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) has announced the issuance and sale of £400 million aggregate principal amount of 3.750% Guaranteed Notes due 2030. These notes, issued by wholly-owned subsidiary Digital Stout Holding, LLC and guaranteed by DLR and its operating partnership, are senior unsecured obligations. The offering, conducted outside the United States in reliance on Regulation S, generated net proceeds of approximately £393.5 million. These funds are earmarked for a variety of strategic purposes, including repaying existing borrowings under credit facilities, funding property and business acquisitions, development projects, and general corporate purposes, which may include further debt repayment or retirement. The notes bear a coupon of 3.750% and mature on October 17, 2030, with annual interest payments commencing in October 2019. The issuance of these notes represents a material definitive agreement and the creation of a direct financial obligation for the company.

Key Highlights

  • 1Digital Realty issued £400 million of 3.750% Guaranteed Notes due 2030.
  • 2The notes are senior unsecured obligations of Digital Stout Holding, LLC, fully guaranteed by Digital Realty Trust, Inc. and its operating partnership.
  • 3Net proceeds from the offering amount to approximately £393.5 million.
  • 4Proceeds will be used for debt repayment, acquisitions, development, and general corporate purposes.
  • 5The notes mature on October 17, 2030, with annual interest payments.
  • 6The issuance was conducted outside the U.S. under Regulation S.

Frequently Asked Questions

Digital Realty intends to use the net proceeds from the issuance of these GBP Notes for various strategic initiatives. These include repaying outstanding borrowings under the company's global credit facilities, acquiring additional properties or businesses, funding development opportunities, and supporting working capital and other general corporate purposes. This may also encompass the repayment or repurchase of other outstanding debt.

The GBP Notes have an aggregate principal amount of £400 million, a coupon of 3.750% per annum, and mature on October 17, 2030. Interest is payable annually on October 17, starting in October 2019. They are senior unsecured obligations of Digital Stout Holding, LLC and are guaranteed by Digital Realty Trust, Inc. and its operating partnership. The notes are redeemable at Digital Stout Holding, LLC's option, with a potential make-whole premium before 90 days of maturity.

Yes, the Indenture governing the GBP Notes contains restrictive covenants. These include limitations on the company's ability to incur additional indebtedness and requirements to maintain a pool of unencumbered assets. Additionally, there are provisions for redemption and events of default that could lead to accelerated maturity of the notes.

The GBP Notes are issued by Digital Stout Holding, LLC, a wholly-owned subsidiary of Digital Realty's operating partnership. The notes are fully and unconditionally guaranteed by Digital Realty Trust, Inc. (the parent company) and its operating partnership, Digital Realty Trust, L.P.