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SAN FRANCISCO-Digital Realty Trust has priced its underwritten public offering of 12 million shares of Series D Cumulative Convertible Preferred Stock at $24.25 per share that including over-allotment shares will generate net proceeds of more than $333 million. The shares will be convertible for shares of Digital Realty Trust common stock and will pay dividends quarterly at a rate of 5.5% per year.

The preferred shares will be convertible, at the holder’s option, at an initial conversion rate of 0.5955 common shares per $25.00 liquidation preference per preferred share (or an initial conversion price of $41.98 per common share), subject to adjustment upon the occurrence of certain events. The initial conversion price represents a 17.5% conversion premium over the closing sale price of the company’s common shares on Jan. 31, 2008 on the New York Stock Exchange, which was $35.73 per share.

Assuming underwriters Citi and Credit Suisse Securities (USA) LLC need the additional 1.8 million shares that will be offered up to cover over-allotments, the estimated net proceeds will be $333.6 million. The proceeds will be used to repay borrowings under its credit facility. It will then use the freed-up credit to for upcoming acquisitions, developments and redevelopment. The company says it is “actively pursuing multiple opportunities for potential acquisitions, with due diligence and negotiations at different stages of advancement.”

At Dec. 31, Digital Realty’s revolving credit facility had a total outstanding balance of $299.7 million, excluding committed letters of credit, consisting of $111.0 million bearing interest at Libor plus 1.2% per annum, which equaled a rate of 6.12%; €57.7 million bearing interest at Euribor plus 1.2% per annum, which equaled a rate of 5.86%; and £51.5 million bearing interest at GBP Libor plus 1.2% per annum, which equaled a rate of 7.55%.

Earlier this week, the company said it has begun construction for a custom data center for HSBC, which signed a long-term lease for the building, the size of which has not yet been disclosed. Rising on a site in suburban London that Digital Realty acquired in April, the facility will be used for the banking and financial services institution’s global computing infrastructure. In November, HSBC postponed plans for a 200,000-sf data center in upstate New York, according to published reports at that time. The London project is expected to be completed in late 2008.

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