Introductory Note
Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “our company,” “the company” or “Digital Realty” refer to Digital Realty Trust, Inc., together with its consolidated subsidiaries, including Digital Realty Trust, L.P., our “operating partnership.”
Item 1.01. Entry into a Material Definitive Agreement.
On October 17, 2018, Digital Stout Holding, LLC, a wholly owned subsidiary of the operating partnership, issued and sold £400 million aggregate principal amount of 3.750% Guaranteed Notes due 2030 denominated in pounds sterling (the “GBP Notes”). The GBP Notes are senior unsecured obligations of Digital Stout Holding, LLC and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the operating partnership. The GBP Notes were sold outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The GBP Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to United States persons (within the meaning of Regulation S under the Securities Act) absent registration or an applicable exemption from the registration requirements. The terms of the GBP Notes are governed by an indenture, dated as of October 17, 2018, among Digital Stout Holding, LLC, Digital Realty Trust, Inc., the operating partnership, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and a transfer agent, and Deutsche Bank Luxembourg S.A., as registrar and a transfer agent (the “Indenture”), a copy of which is attached hereto as Exhibit 4.1 and incorporated herein by reference. The Indenture contains various restrictive covenants, including limitations on our ability to incur additional indebtedness and requirements to maintain a pool of unencumbered assets. The descriptions of the Indenture, the GBP Notes and the guarantees in this report are summaries and are qualified in their entirety by the terms of the Indenture, including the forms of the GBP Notes included therein.
Net proceeds from the offering were approximately £393.5 million after deducting managers’ discounts and estimated offering expenses. We intend to use the net proceeds from the offering of the GBP Notes to repay borrowings outstanding under the operating partnership’s global 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.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
On October 17, 2018, Digital Stout Holding, LLC, a wholly owned subsidiary of the operating partnership, issued and sold £400 million aggregate principal amount of the GBP Notes. The purchase price paid by the initial purchasers for the GBP Notes was 99.117% of the principal amount thereof. The GBP Notes bear interest at the rate of 3.750% per annum and will mature on October 17, 2030. Interest is payable on the GBP Notes on October 17th of each year beginning on October 17, 2019. The GBP Notes are senior unsecured obligations of Digital Stout Holding, LLC and rank equally in right of payment with all of Digital Stout Holding, LLC’s other existing and future senior unsecured and unsubordinated indebtedness. Digital Stout Holding, LLC’s obligations under the GBP Notes are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the operating partnership.
The GBP Notes are redeemable in whole at any time or in part from time to time, at Digital Stout Holding, LLC’s option, at a redemption price equal to the sum of:
| | • | | an amount equal to 100% of the principal amount of the GBP Notes to be redeemed plus accrued and unpaid interest up to, but not including, the redemption date; and |
| | • | | a make-whole premium calculated in accordance with the terms of the Indenture. |
Notwithstanding the foregoing, if any of the GBP Notes are redeemed on or after 90 days prior to the maturity date, the redemption price will not include a make-whole premium.
