8-KMaterial AgreementsFinancial EventsOther Events+1

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Jun 14, 2019)

Filed June 14, 2019For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K on June 14, 2019, reporting the completion of an underwritten public offering of $900 million in aggregate principal amount of 3.600% Notes due 2029. These notes are unsecured senior obligations of Digital Realty Trust, L.P. (the operating partnership) and are fully and unconditionally guaranteed by the parent company, Digital Realty Trust, Inc. The proceeds from this offering are intended to further strengthen the company's financial position and support its ongoing growth initiatives. This issuance represents a significant debt financing event for Digital Realty, allowing it to secure long-term capital at a favorable interest rate. Investors should note that while the notes are senior unsecured obligations of the operating partnership, they are effectively subordinated to any secured indebtedness of the operating partnership and to liabilities of its subsidiaries. The company has outlined specific redemption provisions, including a make-whole premium for early redemption, and detailed events of default that could lead to accelerated maturity.

Key Highlights

  • 1Completion of a $900 million public offering of 3.600% Notes due 2029.
  • 2The notes are general unsecured senior obligations of Digital Realty Trust, L.P.
  • 3Digital Realty Trust, Inc. provides a full and unconditional guarantee for the notes.
  • 4The notes are effectively subordinated to secured debt and subsidiary liabilities.
  • 5Interest rate on the notes is 3.600% per annum, payable semi-annually.
  • 6Maturity date for the notes is July 1, 2029.
  • 7The offering was conducted under an effective shelf registration statement.

Frequently Asked Questions

This 8-K filing primarily announced the completion of a $900 million public offering of 3.600% Notes due 2029 by Digital Realty Trust, L.P., with a guarantee from Digital Realty Trust, Inc. It also detailed the terms of these new notes and the related agreements.

These notes represent a significant addition to Digital Realty's unsecured debt. While they are senior obligations of the operating partnership, investors should be aware they are effectively subordinate to any secured debt and liabilities of subsidiaries. This issuance provides long-term capital at a fixed, relatively low interest rate.

Yes, the notes are governed by an indenture that includes restrictive covenants. These covenants limit the company's ability to incur additional indebtedness and require it to maintain a pool of unencumbered assets. The indenture also specifies events of default that could lead to accelerated maturity of the notes.

The company can redeem the notes in whole or in part at its option before April 1, 2029, at a price equal to 100% of the principal plus accrued interest and a 'make-whole' premium. After April 1, 2029, redemption is at 100% of principal plus accrued interest, without a premium.