Digital Realty Trust, Inc. (NYSE:DLR) and its finance subsidiary, Digital Dutch Finco B.V., have entered into a significant financial transaction, issuing €850 million in guaranteed notes due in 2035, according to a recent 8-K filing with the Securities and Exchange Commission.
The notes, bearing an interest rate of 3.875%, were sold on Tuesday, January 14, 2025, and are senior unsecured obligations of the finance subsidiary, which are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and Digital Realty Trust, L.P.
The offering was executed outside the United States under Regulation S of the Securities Act of 1933, meaning the notes have not been registered under U.S. securities laws and are not available for sale within the U.S. or to U.S. persons without registration or an exemption.
The indenture governing the terms of the notes includes restrictive covenants, such as limitations on incurring additional debt and maintaining a pool of unencumbered assets. The net proceeds from the sale, approximately €838.4 million after deductions, are intended for general corporate purposes. These include repaying borrowings under the operating partnership's global revolving credit facilities, acquiring properties or businesses, funding development opportunities, and maintaining liquidity to support the company's Real Estate Investment Trust (REIT) status.
The notes are redeemable in whole or in part at the issuer's discretion, with a make-whole premium if redeemed before a specified date close to maturity. In case of required withholding taxes, additional amounts will be paid to ensure that holders, who are not U.S. persons for tax purposes, receive the full payment due.
The filing also details the conditions under which the notes might face accelerated maturity, such as payment defaults, failure to comply with agreements, or bankruptcy events concerning Digital Dutch Finco B.V., Digital Realty Trust, Inc., or the operating partnership.
The information for this article was obtained from a recent 8-K filing with the Securities and Exchange Commission.
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