Summary
Digital Realty Trust, Inc. (DLR) announced the effectiveness of a new $740 million senior unsecured term loan facility on January 9, 2023. This facility matures on March 31, 2025, with an option for a twelve-month extension subject to a fee. The interest rate is variable, based on SOFR or a base rate, plus an applicable margin that fluctuates with DLR's corporate credit rating. The initial applicable margin for SOFR-based loans is 0.95% per annum. This new term loan is guaranteed by DLR and certain subsidiaries and includes customary restrictive covenants related to investments, mergers, financial ratios, and distributions. Notably, distributions to stockholders may be restricted during an event of default, except as necessary for REIT qualification or to avoid taxes. The agreement also outlines events of default, including non-payment, covenant breaches, cross-defaults, and change of control, which could lead to acceleration of the loan.
Key Highlights
- 1Effective January 9, 2023, DLR entered into a $740 million senior unsecured term loan facility.
- 2The Term Loan Facility matures on March 31, 2025, with a one-year extension option for the borrower.
- 3Interest rates are variable, tied to SOFR or a base rate, with margins dependent on DLR's corporate credit rating.
- 4The initial applicable margin for SOFR-based loans is 0.95% per annum.
- 5Borrowings are guaranteed by Digital Realty Trust, Inc. and certain subsidiaries.
- 6The agreement contains restrictive covenants regarding investments, mergers, financial ratios, and distributions.
- 7Events of default, including non-payment and change of control, can lead to loan acceleration.