What is the total amount of the new term loan facility?

The new Euro Term Loan Facility totals €750,000,000.

What are the maturity dates for the two tranches of the term loan?

The first tranche, a €375,000,000 facility, matures on August 11, 2025. The second tranche, also for €375,000,000, initially matures on August 11, 2025, but has two one-year extension options.

What is the interest rate on the new loan?

The interest rate is based on EURIBOR plus a margin that ranges from 0.80% to 1.60% per annum, depending on Digital Realty's corporate credit rating. As of the closing date, the applicable rate was EURIBOR plus 0.95% per annum.

Are there any significant restrictions imposed by this loan agreement?

Yes, the agreement includes restrictive covenants that limit the company's ability to make certain investments or merge with other companies. It also requires maintaining specific financial coverage ratios. Importantly, during an event of default, Digital Realty Trust, Inc. is restricted from making distributions to its stockholders, except for amounts necessary to maintain its REIT qualification and avoid certain taxes.

DLR 8-K: Material Agreements & Financial Events

Summary

Digital Realty Trust, Inc. (DLR) announced on August 16, 2022, the entry into a significant material definitive agreement related to financing. Specifically, on August 11, 2022, a wholly-owned subsidiary, Digital Dutch Finco B.V., secured a new €750,000,000 senior unsecured term loan facility. This facility is comprised of two tranches: a €375,000,000 three-year facility maturing in August 2025, and a €375,000,000 five-year facility with an initial maturity in August 2025, which includes two one-year extension options. This financing is crucial for Digital Realty's ongoing operational and strategic initiatives, providing substantial liquidity denominated in Euros. The company has utilized the full amount of the three-year facility and a portion of the five-year facility, with the remaining committed amount available for drawing until September 10, 2022. The interest rate is tied to EURIBOR plus a margin, currently at 0.95%, with potential adjustments based on corporate credit ratings. The agreement includes standard covenants and default provisions, with a key restriction on distributions to stockholders in the event of default, except for amounts necessary to maintain REIT status.

Key Highlights

1Digital Realty secured a new €750,000,000 senior unsecured term loan facility.
2The facility consists of a €375 million 3-year term loan (maturing Aug 2025) and a €375 million 5-year term loan (with extension options).
3The entire €375 million 3-year tranche was funded on closing.
4€125 million of the 5-year tranche was funded on closing, with the remaining €250 million available through September 10, 2022.
5Borrowings are in Euros, with interest based on EURIBOR plus a margin of 0.95% (as of closing).
6The loan is guaranteed by Digital Realty Trust, Inc., Digital Realty Trust, L.P., and Digital Euro Finco, LLC.
7The agreement contains standard restrictive covenants and events of default, including restrictions on distributions to stockholders during an event of default (unless necessary for REIT status).

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Aug 17, 2022)

Summary

Key Highlights

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