Digital Realty Completes $3B Loan Refinancing

SAN FRANCISCO-Digital Realty Trust, Inc., a leading global provider of data center solutions, has completed the refinancing of its global revolving credit facility and term loan.

The refinancing allows the company to reduce pricing, extend loan maturities and increase its aggregate commitments by $450 million. The combined facilities total $3 billion, representing the 5th largest unsecured credit facilities among U.S. REITs. The refinancing provides funds for acquisitions, development, redevelopment, debt repayment, working capital and global expansion.

The $2 billion Global Revolving Credit Facility matures in November 2017, has two six-month extension options, and can be increased up to a total of approximately $2.55 billion U.S. dollar equivalent. Pricing for the facility, based on the company's senior unsecured debt rating of BBB/Baa2, was reduced from 125 to 110 basis points over the applicable index for floating rate advances and the annual facility fee was reduced from 25 to 20 basis points.

The $1 billion Multi-Currency Term Loan maturity is unchanged and remains April 2017, with two six-month extension options added, and total commitments can be increased up to $1.1 billion.  Pricing for the Term Loan, based on the company's senior unsecured debt rating of BBB/Baa2, was reduced from 145 to 120 basis points. 

"We are very pleased with the strong demand we received from the international lending community to participate in the refinancing of these facilities, which were oversubscribed with commitments totaling $4.6 billion from 27 financial institutions from around the globe," said William Stein, chief financial Officer and chief investment officer. "To satisfy this demand, we upsized our Global revolving credit facility by $200 million and increased our term loan by $250 million.  In addition, the improved pricing grid is equal to or better than any widely syndicated credit facility for a U.S. large cap investment grade REIT, including those with a credit rating higher than DLR's BBB/Baa2 rating.  We believe these positive trends illustrate the institutional lender community's view on the strength of our balance sheet and underlying business, while providing us with greater financial flexibility as we continue to expand our portfolio globally."

Funds from the combined facilities may be drawn in U.S, Canadian, Singapore, Australian and Hong Kong Dollars, as well as Euro, Pound Sterling, Swiss Franc, Mexican Pesos and Japanese yen denominations. In addition, the company was able to achieve improved covenants terms and definitions, including the removal of the tangible net worth covenant and reducing the cap rate from 8.25% to 8% on data center assets.

"We would like to acknowledge Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC's efforts in their capacity as joint lead Arrangers and Joint Book Running Managers which led to a successful syndication of the two facilities and extend our gratitude to the entire bank group for their overwhelming support of the Company," Stein added.

Digital Realty Trust, Inc. focuses on delivering customer driven data center solutions by providing secure, reliable and cost effective facilities that meet each customer's unique data center needs. Digital Realty's 127 properties, including three properties held as investments in unconsolidated joint ventures, comprise approximately 23.7 million square feet as of June 30, 2013, including 2.8 million square feet of space held for development. Digital Realty's portfolio is located in 32 markets throughout North America, Europe, Asia and Australia.