8-KMaterial AgreementsFinancial EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Jan 16, 2019)

Filed January 16, 2019For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) announced on January 16, 2019, the issuance and sale of €850 million in aggregate principal amount of 2.500% Guaranteed Notes due 2026. These notes are issued by Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary, and are fully and unconditionally guaranteed by DLR and its operating partnership. The offering, conducted outside the United States under Regulation S, raised approximately €843.5 million after fees and expenses. Investors should note that the net proceeds are intended to finance or refinance eligible green projects, such as those focused on green building, energy efficiency, and renewable energy. Pending allocation to these projects, proceeds may be used for debt repayment, including a tender offer for the company's 5.875% Senior Notes due 2020, and potential borrowings under credit facilities. This issuance represents a strategic move to secure long-term financing with a specific focus on sustainable initiatives.

Key Highlights

  • 1DLR subsidiary issued €850 million in 2.500% Guaranteed Notes due 2026.
  • 2Notes are senior unsecured obligations of Digital Euro Finco, LLC, guaranteed by DLR and its operating partnership.
  • 3Proceeds are earmarked for financing or refinancing eligible green projects.
  • 4Use of proceeds may include redemption of 5.875% Senior Notes due 2020 via tender offer.
  • 5The notes were sold outside the U.S. under Regulation S.
  • 6The coupon rate of 2.500% reflects favorable borrowing costs at the time.
  • 7The Indenture includes restrictive covenants on incurring additional debt and maintaining unencumbered assets.

Frequently Asked Questions

The primary purpose of this debt issuance is to raise capital to finance or refinance eligible green projects, such as those related to green building, energy efficiency, and renewable energy. Pending allocation to these specific projects, the proceeds may be used for other capital management activities, including the repayment of existing debt.

Digital Euro Finco, LLC issued €850 million in 2.500% Guaranteed Notes due 2026. The notes are senior unsecured obligations, mature on January 16, 2026, and pay interest annually on January 16th. They are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and its operating partnership. The notes can be redeemed under certain conditions, including a make-whole premium unless redeemed within 90 days of maturity.

The net proceeds of approximately €843.5 million are intended for eligible green projects. A significant planned use includes the potential redemption of the company's 5.875% Senior Notes due 2020, potentially through a previously announced tender offer. Other uses could include borrowings under the operating partnership's global credit facilities or other outstanding debt securities.

The notes are sold outside the United States to non-U.S. persons under Regulation S and have not been registered under the Securities Act. Payments of principal and interest are intended to be made free of U.S. withholding taxes. If withholding is required by law, Digital Euro Finco, LLC will pay additional amounts to ensure the net payment to non-U.S. holders is not less than what would have been paid without withholding, subject to certain exceptions.