Summary
Digital Realty Trust, Inc. (DLR) announced the issuance of $1.15 billion in aggregate principal amount of 1.875% Exchangeable Senior Notes due 2029, with an option for initial purchasers to buy an additional $150 million. These notes are guaranteed by the company and are senior, unsecured obligations. The proceeds from this issuance will be used for general corporate purposes. The issuance provides DLR with long-term, low-cost debt financing, extending its maturity profile and bolstering its liquidity. The notes are exchangeable into DLR's common stock under certain conditions, offering potential upside for noteholders and dilution for existing shareholders if the stock price appreciates significantly. The exchange rate is initially set at 4.7998 shares per $1,000 principal amount, implying an initial exchange price of approximately $208.34 per share. The company also has the option to redeem the notes under specific conditions, which could trigger a make-whole fundamental change for noteholders.
Key Highlights
- 1DLR's subsidiary issued $1.15 billion in 1.875% Exchangeable Senior Notes due 2029.
- 2An additional $150 million in notes was purchased by initial purchasers exercising their option.
- 3The notes are guaranteed by Digital Realty Trust, Inc. and are senior, unsecured obligations.
- 4Notes are exchangeable into DLR common stock at an initial rate of 4.7998 shares per $1,000 principal.
- 5The company can redeem the notes under specific conditions starting November 2027.
- 6A registration rights agreement mandates DLR to file a resale registration statement for shares issuable upon exchange.
- 7The issuance provides DLR with additional capital and extends its debt maturity profile.