What is the purpose of the forward sale agreements?

The forward sale agreements allow Digital Realty Trust, Inc. to secure capital from the offering upfront while deferring the actual delivery of shares until a future date (no later than March 13, 2023). This provides the company with flexibility in managing its capital structure and share count over time.

When will Digital Realty actually deliver the shares and receive the final cash proceeds?

The shares are expected to be delivered and the cash proceeds received upon physical settlement of the forward sale agreements, which can occur on one or more dates specified by the company, no later than March 13, 2023. The final cash proceeds per share will be the public offering price, less underwriting discounts and commissions, subject to certain adjustments.

Does Digital Realty have any flexibility in how it settles these agreements?

Yes, the company has the right to elect cash settlement or net share settlement, subject to certain conditions. This means they could pay cash to the forward purchasers for the difference between the offering price and the market price at settlement, or they could deliver a net number of shares instead of the full amount, impacting the final dilution.

DIGITAL REALTY TRUST, INC. 8-K SEC Disclosure

Q: What is the potential total number of shares that could be issued or sold?

The initial offering was for up to 7,187,500 shares. This includes the 6,250,000 shares sold on September 13, 2021, and an additional option for underwriters to purchase up to 937,500 shares. If the option is fully exercised and not fully settled by the forward purchasers, DLR may issue additional shares.

Summary

Digital Realty Trust, Inc. (DLR) has announced an at-the-market (ATM) offering of up to 7,187,500 shares of common stock, with a public offering price of $160.50 per share. This offering was structured using forward sale agreements with major financial institutions, acting as forward purchasers, and an underwriting agreement with a syndicate of underwriters. The company sold 6,250,000 shares on September 13, 2021, with the intention to deliver the shares upon physical settlement of the forward sale agreements, which is expected to occur no later than March 13, 2023. This transaction allows DLR to raise capital while providing flexibility in the timing of actual share delivery and settlement. The company has the option to settle the forward agreements through cash or net share settlement, subject to certain conditions, impacting the final cash proceeds received or the number of shares ultimately issued. An additional option for underwriters to purchase up to 937,500 shares exists, providing further potential for capital infusion.

Key Highlights

1DLR entered into forward sale agreements and an underwriting agreement for the issuance and sale of up to 7,187,500 shares of common stock.
2The public offering price for the shares was set at $160.50 per share.
3On September 13, 2021, DLR closed the offering by selling 6,250,000 shares to underwriters via forward purchasers.
4The company intends to deliver shares upon physical settlement of the forward sale agreements, with a deadline of March 13, 2023.
5DLR retains flexibility to settle forward agreements via cash or net share settlement.
6Underwriters have a 30-day option to purchase an additional 937,500 shares.
7The offering is conducted under an effective shelf registration statement on Form S-3.

DIGITAL REALTY TRUST, INC. 8-K Report, Corporate Update (Sep 13, 2021)

Summary

Key Highlights

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