Summary
Digital Realty Trust (DLR) announced significant updates to its debt facilities on October 24, 2018. The company amended and restated its Global Senior Credit Agreement, increasing its senior unsecured revolving credit facility to $2.35 billion, up from $2.0 billion. This facility allows for borrowings in multiple currencies and includes a letter of credit sub-facility. Additionally, DLR entered into an Amended and Restated Term Loan Agreement, establishing a $300 million 5-year term loan (2023 Term Loan) and an approximately $512 million 5-year term loan (2024 Term Loan), replacing a previous $1.55 billion facility. These actions demonstrate Digital Realty's proactive management of its capital structure to support its ongoing growth and operational needs. The company also amended its Yen revolving credit facility, increasing its capacity and aligning its terms. Furthermore, an amendment to the Quill Loan was executed to harmonize its financial covenants with the newly established Global Senior Credit Agreement and Term Loan Agreement, and to reduce interest rates. These comprehensive credit facility updates provide Digital Realty with enhanced financial flexibility and a robust liquidity position.
Key Highlights
- 1Increased Global Senior Credit Facility: The senior unsecured revolving credit facility was expanded to $2.35 billion from $2.0 billion, providing greater borrowing capacity.
- 2New Term Loans Established: Two new senior unsecured term loans were established, totaling approximately $812 million ($300 million and $512 million), with 5-year maturities.
- 3Multi-Currency Capabilities: Both the Global Senior Credit Facility and the Term Loans support borrowings in various international currencies, enhancing operational flexibility.
- 4Yen Revolving Credit Facility Update: The Yen revolving credit facility was also amended, with an increased potential size, to support operations in Japan.
- 5Quill Loan Amendment: The Secured Term Loan Agreement (Quill Loan) was amended to align financial covenants with new agreements and reduce applicable interest rates.
- 6Maturity Profile Extension: The new credit facilities and amendments generally extend the company's debt maturity profile and provide additional flexibility for future growth.
- 7REIT Distribution Protection: Covenants in the credit agreements include provisions to allow for distributions necessary to maintain REIT qualification and avoid excise taxes, even during default scenarios.