Digital Realty Trust issues €850 million in notes due 2034 through subsidiary

Digital Realty Trust, Inc. (NYSE:DLR), a $59 billion market cap specialized REIT with a solid financial health score according to InvestingPro, announced Wednesday that its indirect subsidiary, Digital Dutch Finco B.V., issued and sold €850 million aggregate principal amount of 3.875% Guaranteed Notes due 2034. The Euro-denominated notes are senior unsecured obligations of Digital Dutch Finco B.V. and are fully and unconditionally guaranteed by Digital Realty Trust, Inc. and its operating partnership, Digital Realty Trust, L.P.

The notes were sold outside the United States in reliance on Regulation S under the Securities Act of 1933. According to the company’s statement, the notes were issued at a price of 98.712% of principal and will mature on July 15, 2034. Interest is payable annually on July 15, beginning in 2025.

Net proceeds from the offering were approximately €836.6 million after deducting discounts and estimated expenses. Digital Realty Trust, which maintains a moderate debt level with a debt-to-capital ratio of 0.23 and comfortable current ratio of 1.66, stated that it plans 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 for working capital and other general corporate purposes. InvestingPro analysis reveals the company has maintained dividend payments for 22 consecutive years, demonstrating strong financial discipline. These may include repayment or redemption of other debt or equity securities.

The indenture governing the notes includes covenants restricting the company’s ability to incur additional indebtedness and requires maintenance of a pool of unencumbered assets. The notes are redeemable in whole or in part at the issuer’s option, at a price equal to 100% of the principal plus accrued and unpaid interest and a make-whole premium, except within 90 days of maturity, when no make-whole premium applies.

Events of default under the notes include non-payment of interest or principal, breach of covenants, failure to pay certain other indebtedness in excess of $125 million, and certain bankruptcy or insolvency events. With last twelve months EBITDA of $2.49 billion and strong cash flows, the company appears well-positioned to meet its debt obligations. For deeper insights into Digital Realty’s debt structure and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks.

All payments of principal and interest will be made without withholding or deduction for taxes, subject to certain exceptions. If future tax law changes require additional payments, the notes may be redeemed in whole at the issuer’s option.

This article is based on a press release statement included in a filing with the Securities and Exchange Commission.

In other recent news, Digital Realty has announced the pricing of €850 million in guaranteed notes due in 2034 with a 3.875% interest rate. The proceeds from this offering are intended for various corporate purposes, including debt repayment and potential acquisitions. Mizuho (NYSE:MFG) has raised its price target for Digital Realty Trust to $191 from $177, maintaining an Outperform rating, citing strong bookings and potential upside from the fund as key factors. Stifel has also reaffirmed its Buy rating on the company’s stock, highlighting strong leasing performance and a robust pipeline of deals. Digital Realty recently held its Annual Meeting of Stockholders, where all director nominees were elected, and key proposals, including the ratification of KPMG LLP as the independent auditor, were approved. The company declared second-quarter dividends for 2025, with a common stock dividend of $1.22 per share and various dividends for preferred stockholders. These dividends are scheduled for distribution at the end of June.

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