Digital Realty Trust issues €850 million in 3.875% notes due 2034

Digital Realty Trust, Inc. (NYSE:DLR), a prominent player in the Specialized REITs industry with a market capitalization of $59 billion, announced Wednesday that its indirect wholly owned finance subsidiary, Digital Dutch Finco B.V., has issued and sold €850 million in aggregate principal amount of 3.875% Guaranteed Notes due 2034. The transaction was completed outside the United States under Regulation S of the Securities Act of 1933. According to InvestingPro analysis, the company has maintained dividend payments for 22 consecutive years, currently offering a 2.75% yield.

The Euro-denominated notes are senior unsecured obligations of Digital Dutch Finco B.V. and are fully and unconditionally guaranteed by both Digital Realty Trust, Inc. and its operating partnership, Digital Realty Trust, L.P. The notes mature on July 15, 2034, and will pay interest annually on July 15, beginning July 15, 2025.

According to a press release statement, the net proceeds from the offering were approximately €836.6 million after deducting managers’ discounts and estimated offering expenses. Digital Realty intends to use the funds to temporarily repay borrowings under its global revolving credit facilities, acquire additional properties or businesses, fund development opportunities, invest in interest-bearing accounts and short-term securities, and provide for working capital and other general corporate purposes. These may include repayment or retirement of other debt or equity securities.

The notes were issued at a purchase price of 98.712% of the principal amount. They are redeemable in whole or in part at the issuer’s option at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, and a make-whole premium, except if redeemed within 90 days of maturity, when no make-whole premium applies.

The indenture governing the notes includes restrictive covenants limiting the company’s ability to incur additional indebtedness and requiring maintenance of a pool of unencumbered assets. Events of default under the notes include nonpayment of interest or principal, certain covenant breaches, cross-defaults on other significant indebtedness, and bankruptcy or insolvency events.

This summary is based on a statement included in a filing with the U.S. Securities and Exchange Commission. InvestingPro’s Fair Value analysis indicates the stock is currently trading above its Fair Value. Discover detailed valuation metrics, financial health scores, and expert insights in the comprehensive Pro Research Report, available for Digital Realty Trust and 1,400+ other top US stocks.

In other recent news, Digital Realty Trust announced the issuance of €850 million in notes due 2034 through its subsidiary, Digital Dutch Finco B.V. The notes carry a 3.875% interest rate and are fully guaranteed by Digital Realty Trust and its operating partnership. The company plans to use the proceeds to repay borrowings, acquire properties, and fund corporate opportunities. Mizuho (NYSE:MFG) has raised its price target for Digital Realty Trust to $191, citing strong bookings and potential upside from the fund, maintaining an Outperform rating. Additionally, Stifel reaffirmed a Buy rating with a $190 price target, highlighting strong leasing performance and growth prospects. Digital Realty Trust also reported the results of its Annual Meeting, where all director nominees were elected, and KPMG LLP was ratified as the independent auditor. The company received strong stockholder support for its executive compensation and employee stock purchase plan, though a proposal on the human right to water did not pass. These developments indicate a solid endorsement from stockholders for Digital Realty Trust’s governance and strategic direction.

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