AUSTIN, Texas - Digital Realty (NYSE: NYSE:DLR), a prominent provider of data center, colocation, and interconnection solutions, has successfully amended and upsized its senior unsecured multi-currency global revolving credit facility from $3.75 billion to $4.2 billion. This financial restructuring includes the extension of the maturity date by three years, with an expiration now set for January 2029. The company also retains the option to further extend the facility's maturity with two six-month extensions under certain conditions.
In addition to the global facility's expansion, Digital Realty has also upsized its Japanese yen-denominated revolving credit facility. The facility's previous value of ¥33.285 billion has been increased to ¥42.511 billion, which is approximately $297 million, with a similar three-year extension on the maturity date to January 2029. This credit facility also comes with two six-month extension options and the possibility of further expansion up to an additional ¥60 billion, or about $418 million. The pricing for this facility is set at 50 basis points over the applicable index for floating rate advances, reflecting the company's BBB / Baa2 senior unsecured debt rating.
A notable feature of these credit facilities is the inclusion of a sustainability-linked pricing component, which adjusts pricing based on the company's annual performance against specific environmental, social, and governance (ESG) targets. This reflects Digital Realty's ongoing commitment to sustainability and ESG leadership.
Matt Mercier, Digital Realty's Chief Financial Officer, expressed satisfaction with the refinancing process, citing strong support from the global lending community, which he believes signifies confidence in the company's balance sheet and global data center platform. He also noted the refinancing's oversubscription and the financial flexibility it provides for the company's continued growth.
The funds from these facilities are available in various currencies, including U.S., Canadian, Singapore, Australian, and Hong Kong dollars, as well as euro, pound sterling, Swiss francs, Japanese yen, Indonesian rupiah, and Korean won.
Digital Realty acknowledged the efforts of BofA Securities, Inc., Citibank, N.A., and JPMorgan Chase (NYSE:JPM) Bank, N.A., as well as Sumitomo Mitsui (NYSE:SMFG) Banking Corporation, MUFG Bank, LTD, and Mizuho Bank, LTD for their roles in arranging and managing the credit facilities.
This financial move is based on a press release statement from Digital Realty and is intended to enhance the company's ability to invest in its global portfolio.
In other recent news, Digital Realty Trust has issued €850 million in senior unsecured notes via its finance subsidiary, Digital Dutch Finco B.V., for green projects. The notes, due 2033, are expected to fund renewable energy, energy efficiency, and other sustainable initiatives. In the interim, the funds may be used for general corporate purposes like repaying outstanding borrowings or acquiring properties. Truist Securities and TD Cowen have updated their price targets for Digital Realty Trust, with Truist Securities raising the target to $168.00 and retaining a Buy rating, while TD Cowen reduced its target to $120, maintaining a Hold rating. The company also reported a strong Q2 performance, securing $164 million in new contracts, and expanded its European presence with the acquisition of a London data center campus. A successful private capital drive brought in over $10 billion, further bolstering Digital Realty Trust's financial position. These are some of the recent developments for Digital Realty Trust.
InvestingPro Insights
Digital Realty's recent financial restructuring aligns well with its strong market position and financial health, as evidenced by data from InvestingPro. The company's market capitalization stands at an impressive $53.81 billion, underscoring its significant presence in the Specialized REITs industry.
InvestingPro Tips highlight that Digital Realty has maintained dividend payments for 21 consecutive years, a testament to its financial stability and commitment to shareholder returns. This track record is particularly relevant in light of the company's recent credit facility expansion, as it suggests a balanced approach to growth and investor rewards.
The company's revenue for the last twelve months as of Q2 2023 was $5.35 billion, with a revenue growth of 4.76% over the same period. This growth, coupled with the expanded credit facilities, positions Digital Realty well for continued expansion in the global data center market.
It's worth noting that Digital Realty is trading near its 52-week high, with a price that is 97.57% of its 52-week peak. This suggests strong investor confidence in the company's strategic moves, including the recent credit facility upsizing.
For investors seeking a deeper understanding of Digital Realty's financial position, InvestingPro offers 11 additional tips, providing a comprehensive view of the company's prospects and valuation metrics.
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