Digital Realty Trust, L.P. Announces Proposed Exchangeable Senior Notes Offering
Rhea-AI Summary
Digital Realty Trust (NYSE: DLR) announced that its subsidiary, Digital Realty Trust, L.P., plans to offer $1 billion in exchangeable senior notes due 2029, with an additional $150 million option for initial purchasers. The notes will be senior, unsecured obligations with semi-annual interest payments, maturing on November 15, 2029. They will be redeemable after November 22, 2027, if certain conditions are met. The proceeds will be used to temporarily repay revolving credit facilities, acquire properties, fund development, and for general corporate purposes.
Positive
- Access to significant capital with $1 billion note offering
- Additional $150 million option available for purchasers
- Flexibility in debt management with redemption options
- Strengthening of financial position through debt refinancing
Negative
- Potential dilution of existing shareholders if notes are exchanged for common stock
- Increased debt obligation with associated interest payments
- Additional financial leverage that could impact balance sheet metrics
News Market Reaction 1 Alert
On the day this news was published, DLR declined 4.09%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
The notes will be senior, unsecured obligations of Digital Realty L.P., will accrue interest payable semi-annually in arrears and will mature on November 15, 2029, unless earlier repurchased, redeemed or exchanged. Noteholders will have the right to exchange their notes in certain circumstances and during specified periods. Digital Realty L.P. will settle exchanges in cash and, if applicable, shares of Digital Realty's common stock.
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Digital Realty L.P.'s option at any time, and from time to time, on or after November 22, 2027 and on or before the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Digital Realty's common stock exceeds
If certain corporate events that constitute a "fundamental change" occur, then, subject to a limited exception, noteholders may require Digital Realty L.P. to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.
The notes will be entitled to the benefits of a registration rights agreement pursuant to which Digital Realty will agree to register, under the Securities Act, the resale of the shares of Digital Realty's common stock, if any, issuable upon exchange of the notes within specified time periods and subject to certain limitations.
The interest rate, initial exchange rate and other terms of the notes will be determined at the pricing of the offering.
Digital Realty L.P. intends to use the net proceeds from the offering to temporarily repay borrowings outstanding under its global revolving credit facilities, acquire additional properties or businesses, fund development opportunities, and to provide for working capital and other general corporate purposes, including potentially for the repayment of other debt or the repurchase, redemption, or retirement of outstanding debt securities, or a combination of the foregoing.
The offer and sale of the notes, the guarantee and any shares of Digital Realty's common stock issuable upon exchange of the notes have not been registered under the Securities Act or any other securities laws, and the notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. Although Digital Realty L.P. and Digital Realty intend to enter into a registration rights agreement pursuant to which Digital Realty will agree to register, under the Securities Act, the resale of the shares of Digital Realty's common stock, if any, issuable upon exchange of the notes, the registration rights agreement will contain significant limitations, and a resale registration statement may not be available at the time investors wish to resell the shares of Digital Realty's common stock, if any, issuable upon exchange of their notes. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of Digital Realty's common stock issuable upon exchange of the notes, nor will there be any sale of the notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.
About Digital Realty
Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITAL®, the company's global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx®) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across 25+ countries on six continents.
Investor Relations
Jordan
Digital Realty
+1 415 275 5344
InvestorRelations@digitalrealty.com
Safe Harbor Statement
This press release includes forward-looking statements, including statements regarding the anticipated terms of the notes being offered, the completion, timing and size of the proposed offering and the intended use of the net proceeds. Forward-looking statements represent Digital Realty's current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of Digital Realty's common stock and risks relating to Digital Realty's business, including those described in periodic reports that Digital Realty files from time to time with the SEC. Digital Realty L.P. may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the offering or the notes or its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and neither Digital Realty nor Digital Realty L.P. undertakes to update the statements included in this press release for subsequent developments, except as may be required by law.
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SOURCE Digital Realty Trust
FAQ
What is the size of Digital Realty's (DLR) 2029 note offering?
When will Digital Realty's (DLR) 2029 notes mature?
How will Digital Realty (DLR) use the proceeds from the 2029 note offering?
When can Digital Realty (DLR) redeem the 2029 notes?
