Digital Realty gets extended, upsized $3.55 billion finance package

By Wendy Van Sickle

Columbus, Ohio, Jan. 21 – Digital Realty Trust, Inc. completed the refinancing of its global revolving credit facility and term loan, upsizing total commitments to $3.55 billion, tightening pricing by 10 basis points and extending the debt maturities by more than two years, according to a Thursday press release.

The $2 billion revolving credit facility matures in January 2020 and has two one-year extension options.

The revolver can be increased up to a total of $2.5 billion.

Interest is based on the company’s debt rating and is initially Libor plus 100 bps. The commitment fee is initially 20 bps.

The revolving facility replaces a $2 billion revolver entered in August 2013.

The $1.55 billion term loan includes a five-year $1.25 billion multi-currency loan that matures in January 2021 and a seven-year $300 million U.S.-dollar loan that matures in January 2023.

Total commitments can be increased up to $1.8 billion.

Pricing on the term loan facility is also based on Digital Realty’s debt rating and is initially Libor plus 110 bps for the multicurrency loan and Libor plus 155 bps for the U.S.-dollar loan.

Concurrent with the closing of the term loan, the company entered into a series of interest rate swaps, such that the term loan balance is now 75% fixed with an all-in rate of 2.3%. Pro forma for the refinancing and interest rate swaps, variable rate debt now represents less than 15% of total debt outstanding; the weighted-average maturity, including extension options, is now 6.2 years; and no more than $250 million, or less than 5% of total debt, comes due in any year prior to 2020.

The term loan facility replaces a $1 billion term loan agreement entered in April 2012.

Funds from the revolver and multicurrency term loan may be drawn in U.S., Canadian, Singapore, Australian and Hong Kong dollars, as well as euro, pound sterling and Japanese yen denominations.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC acted as joint lead arrangers and joint bookrunners for the revolver; they were joined by Bank of Nova Scotia and Sumitomo Mitsui Banking Corp. for the multicurrency term loan and by U.S. Bank NA and TD Securities (USA) LLC for the U.S.-dollar term loan.

Citibank, NA, acted as administrative agent and Bank of America, NA and JPMorgan Chase Bank, NA, as syndication agents for the revolving and term facilities.

Proceeds may be used for acquisitions, development, redevelopment, debt repayment, working capital and general corporate purposes.

Andrew P. Power, Digital Realty’s chief financial officer, said in the press release that the facilities were oversubscribed with commitments totaling more than $5 billion.

Digital Realty is a manager and owner of technology-related real estate and is based in San Francisco.

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