8-KOther EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Corporate Update (Jul 2, 2020)

Filed July 2, 2020For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) announced on July 2, 2020, that its operating partnership will redeem all outstanding 3.625% Notes due 2022 and 3.950% Notes due 2022. The total principal amount to be redeemed is $800 million ($300 million of the 3.625% Notes and $500 million of the 3.950% Notes). The redemption is scheduled for August 3, 2020. This redemption is significant as it will retire these specific debt instruments entirely, meaning no further principal payments will be due on these notes. Investors holding these notes will receive the principal amount plus accrued interest, at a premium above par for both note series. This action suggests DLR may be leveraging favorable market conditions or restructuring its debt to potentially lower interest costs or improve its balance sheet.

Key Highlights

  • 1Digital Realty's operating partnership will redeem $300 million in 3.625% Notes due 2022 and $500 million in 3.950% Notes due 2022.
  • 2The total principal amount being redeemed is $800 million.
  • 3The redemption date is set for August 3, 2020.
  • 4Both the 3.625% Notes and 3.950% Notes will be fully retired, with no remaining principal outstanding after redemption.
  • 5Redemption prices are above the principal amount (106.0018% for 3.625% notes and 106.0306% for 3.950% notes), plus accrued interest.
  • 6The company has issued formal notices of redemption to noteholders.

Frequently Asked Questions

Digital Realty's operating partnership is redeeming its outstanding 3.625% Notes due 2022 and 3.950% Notes due 2022 in full. This means the company is paying back the principal amount of these notes before their original maturity date.

The company will redeem a total of $800 million in principal amount of these notes. Specifically, $300 million of the 3.625% Notes and $500 million of the 3.950% Notes. The redemption is scheduled to occur on August 3, 2020.

Yes, noteholders will receive the principal amount plus any accrued and unpaid interest. Additionally, the redemption price is set at a premium above the principal amount. For the 3.625% Notes, the redemption price is 106.0018% of the principal, and for the 3.950% Notes, it is 106.0306% of the principal.

The filing does not explicitly state the reason for the redemption. However, companies typically redeem debt early when they can secure more favorable financing terms (e.g., lower interest rates), have excess cash, or wish to simplify their capital structure. This redemption suggests DLR may be taking advantage of current market conditions or strategically managing its debt.