Digital Realty to price $150 million 20-year exchangeables talked at 3.875%-4.375%, up 15%-20%

By Kenneth Lim

Boston, Aug. 8 - Digital Realty Trust Inc. plans to price $150 million of 20-year exchangeable senior debentures on Wednesday after the market closes, with talk for a coupon of 3.875% to 4.375% and an initial conversion premium of 15% to 20%.

The debentures are offered at par and are exchangeable into Digital Realty Trust Inc. common stock. They will be issued by Digital Realty's operating partnership subsidiary, Digital Realty Trust LP, but will be guaranteed by the parent company.

There is an over-allotment option for a further $22.5 million.

Citigroup and Merrill Lynch are the bookrunners for the Rule 144A offering.

The exchangeables are non-callable for the first five years and may be put in years five, 10 and 15.

There is dividend and takeover protection.

Digital Realty, a San Francisco-based real estate investment trust that focuses on technology-related real estate, will use the proceeds from the deal to reduce its debt under an unsecured credit facility due 2008. It also plans to reborrow amounts under that credit facility to fund acquisitions and for general corporate purposes.

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