Digital Realty's Finance Arm Prices €1 Billion Of 10-Year Notes At 5.125%, Sold Only Outside U.S.
The notes priced at 99.289% of face value, with proceeds tied to the company's Green Bond Framework and closing set for Friday.
Digital Realty's finance subsidiary priced €1 billion of 5.125% Guaranteed Notes due 2036 on Tuesday at 99.289% of principal, according to an 8-K filed that day. The notes are sold only outside the United States, and settlement is expected Friday.
What the 8-K says
The issuer is Digital Euro Finco, LLC, a wholly owned indirect finance subsidiary of Digital Realty Trust, L.P., the company's operating partnership. The notes are senior unsecured obligations of that subsidiary, meaning no specific assets back them. Digital Realty Trust, Inc. and the operating partnership guarantee them fully and unconditionally.
Interest is paid in cash once a year, in arrears, at 5.125% per annum from and including October 9, 2026. The notes mature on October 9, 2036.
The notes are being sold in reliance on Regulation S, the rule governing offers made outside the U.S. They have not been and will not be registered under the Securities Act, and cannot be offered or sold in the United States or to U.S. persons without registration or an exemption, according to the press release.
The 8-K says the notes will be issued under an indenture with Deutsche Trustee Company Limited as trustee, Deutsche Bank AG, London Branch as paying agent, and Deutsche Bank Luxembourg S.A. as registrar.
Where the money goes
Digital Realty says it intends to allocate an amount equal to the net proceeds to finance or refinance new or existing projects under its Green Bond Framework. The 8-K lists eligible categories including renewable energy, energy efficiency, clean transportation, green building and climate change adaptation.
Until the money is allocated, the company says it may use an equal amount for other purposes. These include temporarily repaying borrowings under the operating partnership's global revolving credit facilities, buying properties or businesses, and funding development.
The list also covers interest-bearing accounts and short-term securities, working capital, and general corporate purposes. That can include repaying other debt or redeeming, repurchasing or retiring outstanding equity or debt securities.
The 8-K carries the usual caution that there is no assurance the offering will close on the terms described, or at all.
What to watch
Settlement is expected on Friday, October 9, subject to customary closing conditions. The company's shares closed Tuesday at $184.65, up 2.66%, according to market data. The filing does not tie that move to the bond.
Until settlement on October 9, the offering remains priced but not closed, and the filing leaves open whether the company will not close it on these terms.
Sources
- 8-K Filing — DIGITAL REALTY TRUST, INC. (DLR) — SEC EDGAR
- Exhibit d106844dex991.htm — DIGITAL REALTY TRUST, INC. 8-K exhibit — SEC EDGAR
