8-KMaterial AgreementsFinancial EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Jan 17, 2020)

Filed January 17, 2020For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) has announced the issuance and sale of €1.6786 billion in aggregate principal amount of senior unsecured Euro Notes through its indirect finance subsidiary, Digital Dutch Finco B.V. These notes are structured into three tranches: €300.0 million of 0.125% Notes due 2022, €650.0 million of 0.625% Notes due 2025, and €750.0 million of 1.500% Notes due 2030. The notes are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and its operating partnership, offering investors a degree of security. The net proceeds will be utilized for a variety of corporate purposes, including the potential financing or refinancing of green projects, repayment of InterXion acquisition-related debt, general corporate needs, and debt repayment. This issuance highlights DLR's ongoing access to capital markets to fund its strategic initiatives and operational requirements.

Key Highlights

  • 1Digital Realty Trust (DLR) subsidiary, Digital Dutch Finco B.V., issued €1.6786 billion in aggregate principal amount of Euro Notes.
  • 2The notes are comprised of three tranches: €300.0 million of 0.125% Notes due 2022, €650.0 million of 0.625% Notes due 2025, and €750.0 million of 1.500% Notes due 2030.
  • 3All Euro Notes are senior unsecured obligations of Digital Dutch Finco B.V. and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and its operating partnership.
  • 4Net proceeds are intended for various uses, including financing or refinancing eligible green projects, repaying debt related to the InterXion acquisition, general corporate purposes, and debt reduction.
  • 5The issuance includes specific provisions for mandatory redemption of the 2025 and 2030 Notes at a premium (101%) if the InterXion combination is not consummated by January 27, 2021, or if the purchase agreement is terminated.
  • 6The indentures governing the notes contain restrictive covenants, including limitations on incurring additional indebtedness and requirements to maintain unencumbered assets.
  • 7The notes were sold outside the United States in reliance on Regulation S and are not registered under the U.S. Securities Act of 1933.

Frequently Asked Questions

The primary purpose of this debt issuance was to raise capital for various corporate uses, including financing or refinancing eligible green projects, potentially repaying debt associated with the InterXion acquisition, funding general corporate purposes, and reducing existing debt.

The successful completion of the InterXion combination is not a condition for the offering itself. However, the 2025 and 2030 Notes will be mandatorily redeemed at a premium (101% of principal) if the InterXion combination is not completed by January 27, 2021, or if the purchase agreement is terminated before that date. This suggests the notes may have been partly intended to bridge financing for the acquisition.

Yes, the Euro Notes are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and its operating partnership, providing an additional layer of credit support for investors.

Key risks include standard debt risks such as interest rate risk, credit risk of the issuer and guarantor, and liquidity risk. Specific to this issuance, there are covenants that limit the company's ability to incur additional debt and require maintaining unencumbered assets. Additionally, the mandatory redemption provision tied to the InterXion acquisition introduces a conditional redemption risk for the 2025 and 2030 Notes.