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 January 16, 2019, Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of the operating partnership, issued and sold €850 million aggregate principal amount of 2.500% Guaranteed Notes due 2026 denominated in Euros (the “Euro Notes”). The Euro Notes are senior unsecured obligations of Digital Euro Finco, LLC and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the operating partnership. The Euro Notes were sold outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Euro 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 Euro Notes are governed by an indenture, dated as of January 16, 2019, among Digital Euro Finco, 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 Euro 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 Euro Notes included therein.
Net proceeds from the offering were approximately €843.5 million after deducting managers’ discounts and estimated offering expenses. We intend to allocate an amount equal to the net proceeds from the offering of the Euro Notes to finance or refinance, in whole or in part, certain green building, energy and resource efficiency and renewable energy projects (collectively, “Eligible Green Projects”), including the development and redevelopment of such projects. Pending the allocation of an amount equal to the net proceeds of the Euro Notes to Eligible Green Projects, all or a portion of an amount equal to the net proceeds may be used for the payment of outstanding indebtedness or other capital management activities. Such indebtedness to be redeemed or repaid is expected to include the operating partnership’s 5.875% Senior Notes due 2020 pursuant to a previously announced tender offer for such notes, by redemption or otherwise, and may include borrowings under the operating partnership’s global credit facilities, as well as other outstanding debt securities.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
On January 16, 2019, Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of the operating partnership, issued and sold €850 million aggregate principal amount of the Euro Notes. The purchase price paid by the initial purchasers for the Euro Notes was 99.956% of the principal amount thereof. The Euro Notes bear interest at the rate of 2.500% per annum and will mature on January 16, 2026. Interest is payable on the Euro Notes on January 16th of each year beginning on January 16, 2020. The Euro Notes are senior unsecured obligations of Digital Euro Finco, LLC and rank equally in right of payment with all of Digital Euro Finco, LLC’s other existing and future senior unsecured and unsubordinated indebtedness. Digital Euro Finco, LLC’s obligations under the Euro Notes are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and the operating partnership.
The Euro Notes are redeemable in whole at any time or in part from time to time, at Digital Euro Finco, LLC’s option, at a redemption price equal to the sum of:
| | • | | an amount equal to 100% of the principal amount of the Euro 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. |
