8-KMaterial AgreementsFinancial EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Oct 9, 2019)

Filed October 9, 2019For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) announced on October 9, 2019, the issuance of €500 million in aggregate principal amount of 1.125% Guaranteed Notes due 2028 by its indirect finance subsidiary, Digital Euro Finco, LLC. These notes are senior unsecured obligations, fully and unconditionally guaranteed by DLR and its operating partnership, and were sold outside the United States under Regulation S. The net proceeds of approximately €491.9 million are earmarked for repaying outstanding borrowings under the company's global revolving credit facility, funding strategic acquisitions and development opportunities, and general corporate purposes, including potential debt repayment or share repurchases. The issuance represents a strategic move to secure long-term financing at a favorable interest rate and diversify its funding sources.

Key Highlights

  • 1DLR's subsidiary issued €500 million of 1.125% Guaranteed Notes due 2028.
  • 2The notes are senior unsecured obligations, guaranteed by DLR and its operating partnership.
  • 3Proceeds are intended for credit facility repayment, acquisitions, development, and general corporate uses.
  • 4The offering generated net proceeds of approximately €491.9 million.
  • 5The notes were sold internationally under Regulation S.
  • 6The interest rate of 1.125% is notably low, reflecting favorable market conditions or DLR's credit standing.
  • 7The Indenture includes restrictive covenants on future indebtedness and requires maintaining unencumbered assets.

Frequently Asked Questions

The primary purpose is to raise capital to repay borrowings under the company's revolving credit facility, fund future property or business acquisitions, support development projects, and for general corporate purposes. This allows DLR to manage its debt and fund growth initiatives.

The 1.125% interest rate is very low, suggesting favorable borrowing conditions for Digital Realty at the time of issuance. This indicates strong market confidence in DLR's creditworthiness and potentially a strategic move to lock in low-cost debt for an extended period.

Yes, the 1.125% Guaranteed Notes due 2028 are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and its operating partnership. This provides an additional layer of security for the noteholders.

As senior unsecured obligations, the Euro Notes rank equally with other unsecured and unsubordinated indebtedness of Digital Euro Finco, LLC. In the event of bankruptcy or insolvency, noteholders would be subject to the claims of secured creditors and other priority obligations. Additionally, the covenants in the Indenture, while protective for noteholders, could restrict DLR's future financial flexibility.