What is the primary purpose of this new ATM equity offering program?

The primary purpose is to provide Digital Realty Trust (DLR) with the flexibility to raise capital efficiently, up to $1.5 billion, for general corporate purposes. This includes potentially repaying outstanding borrowings, funding the acquisition of properties or businesses, supporting development opportunities, and general working capital needs.

What is an 'at-the-market' (ATM) offering, and why is DLR using it?

An at-the-market offering allows a company to sell its shares of common stock into the existing stock market over a period of time, at prevailing market prices, or at prices related to prevailing market prices. DLR is using this program to access equity capital opportunistically and efficiently without significantly impacting the stock price, as sales occur gradually.

What is the significance of the forward sale agreements?

Forward sale agreements provide DLR with an additional method to raise capital. Under these agreements, DLR may agree to sell shares at a future date. A forward purchaser might borrow and sell shares in the market to hedge their exposure. DLR expects to receive cash proceeds upon the full physical settlement of these agreements, though the final amount can vary based on the settlement terms (physical, cash, or net share settlement).

What happens to the unsold shares from the previous ATM program?

At the time the new sales agreement was entered into, approximately $408.7 million of common stock remained unsold under the previous ATM program, which was terminated. These unsold shares are no longer part of an active program under the previous agreement.

DIGITAL REALTY TRUST, INC. 8-K SEC Disclosure

Summary

Digital Realty Trust, Inc. (DLR) announced a new at-the-market (ATM) equity offering program on August 4, 2023, with the potential to raise up to $1.5 billion in aggregate gross proceeds. This new program replaces a previous ATM program initiated in April 2022. The company is utilizing a multi-faceted approach that includes the ability to sell shares directly through sales agents or to forward purchasers via forward sale agreements, offering flexibility in how capital is raised and managed. The net proceeds from these offerings are intended for general corporate purposes, including repaying debt, funding acquisitions, and supporting development opportunities, which are crucial for maintaining and expanding DLR's data center portfolio. This strategic move allows DLR to access equity capital efficiently in response to market conditions. The introduction of forward sale agreements provides an option for the company to potentially receive cash proceeds upon settlement, though the exact amount depends on the settlement method (physical, cash, or net share). Investors should note that the fees associated with these sales agents and forward sellers are capped at 2.0% of the gross sales price, ensuring cost-efficiency. The termination of the prior ATM program, which had approximately $408.7 million in unsold shares, indicates a shift in strategy and capital raising approach.

Key Highlights

1Digital Realty Trust (DLR) has entered into a new At-the-Market (ATM) equity offering program with a maximum aggregate offering price of $1.5 billion.
2The new program replaces a previous ATM program that was terminated concurrently with the execution of the new sales agreement.
3The company may offer and sell shares of common stock through sales agents or via forward sale agreements with forward purchasers.
4Proceeds are intended for general corporate purposes, including debt repayment, property acquisitions, and funding development.
5Sales agents and forward sellers will receive commissions capped at 2.0% of the gross sales price.
6Approximately $408.7 million in shares remained unsold under the previous ATM program at its termination.

DIGITAL REALTY TRUST, INC. 8-K Report, Corporate Update (Aug 4, 2023)

Summary

Key Highlights

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