8-KSecurities & ListingOther Events

DIGITAL REALTY TRUST, INC. 8-K Report, Unregistered Securities Sale (Mar 18, 2019)

Filed March 18, 2019For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K on March 18, 2019, to report on the partial exercise of an over-allotment option related to its 5.850% Series K Cumulative Redeemable Preferred Stock offering. On March 14, 2019, the underwriters exercised their option to purchase an additional 400,000 shares of Series K Preferred Stock, with the sale finalized on March 15, 2019, generating approximately $9.7 million in net proceeds for the company after underwriting discounts. This issuance was conducted under an existing shelf registration statement. In connection with the stock sale, Digital Realty Trust, L.P. issued a corresponding number of Series K Cumulative Redeemable Preferred Units to the parent company, Digital Realty Trust, Inc., in exchange for the proceeds. This transaction, while a minor capital raise, confirms the company's ability to tap into preferred equity markets and utilize its established shelf registration to raise capital efficiently.

Key Highlights

  • 1Partial exercise of over-allotment option for 400,000 shares of Series K Cumulative Redeemable Preferred Stock.
  • 2Net proceeds of approximately $9.7 million generated from the sale of the additional preferred shares.
  • 3Sale completed on March 15, 2019.
  • 4Offering conducted under an effective shelf registration statement filed in September 2017.
  • 5Digital Realty Trust, L.P. issued 400,000 Series K Cumulative Redeemable Preferred Units to the parent company.
  • 6Issuance of Series K Preferred Units by the L.P. to the parent company was exempt from registration under Section 4(a)(2) of the Securities Act.
  • 7The Series K Preferred Units have substantially similar rights and preferences as the Series K Preferred Stock.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the partial exercise of the over-allotment option and the subsequent sale of an additional 400,000 shares of Digital Realty Trust's 5.850% Series K Cumulative Redeemable Preferred Stock.

Digital Realty Trust, Inc. raised approximately $9.7 million in net proceeds from the sale of the additional 400,000 shares of Series K Preferred Stock, after deducting underwriting discounts.

No, this was not a new offering. The additional shares were sold as part of the exercise of an over-allotment option related to a previously established offering of Series K Preferred Stock, conducted under an existing shelf registration statement.

The issuance of Series K Preferred Units by Digital Realty Trust, L.P. to its parent company, Digital Realty Trust, Inc., is a standard intercompany transaction. It allows the parent company to receive the proceeds from the stock sale and hold a corresponding preferred interest in the operating partnership, ensuring that the rights and preferences are aligned.