DuPont accepts $475 million early tenders in Digital Realty offer, calls rest of 5.875% notes

By Marisa Wong

Morgantown, W.Va., Sept. 14 – Digital Realty announced the early tender results for and the early settlement of the tender offer for the outstanding $600 million 5.875% senior notes due 2021 issued by DuPont Fabros Technology, LP.

Penguins OP Sub, LLC, an indirect subsidiary of Digital Realty Trust, Inc., launched the tender offer and a related consent solicitation on Aug. 30.

As of 5 p.m. ET on Sept. 13, the early tender deadline, holders had tendered about $475 million, or roughly 79%, of the outstanding notes and delivered related consents.

The early tendered notes were accepted for purchase on Thursday, immediately after closing of the merger between Digital Realty and DuPont Fabros Technology, Inc., according to a press release.

As previously announced, DuPont Fabros Technology, Inc. has a controlling interest in the notes’ issuer DuPont Fabros Technology, LP, and the tender offer and consent solicitation are being made in connection with and are conditioned on the merger.

The total consideration paid for each $1,000 principal amount of early tendered notes was $1,032.50 plus accrued interest from June 15 to but excluding Sept. 14. The total consideration included a $30 consent payment.

Having received the necessary consents from holders, DuPont Fabros executed a supplemental indenture amending the notes.

As previously announced, the company solicited consents to amend the notes to eliminate substantially all of the restrictive covenants and some events of default and to shorten the minimum notice required for a redemption to two business days.

Holders who tendered their notes were deemed to consent to all of the proposed amendments, and holders could not deliver consents without tendering their notes.

The tender offer and consent solicitation will remain open until 11:59 p.m. ET on Sept. 27. Tendered notes may no longer be withdrawn.

Holders who tender after the early deadline will receive the total consideration less the consent fee, or $1,002.50 per $1,000 principal amount, plus accrued interest to the final settlement date. The final settlement date is expected to be the business day following the expiration of the offer.

After settling the early tendered notes, the company issued a notice of redemption for the remaining outstanding principal amount of 5.875% notes. Any remaining notes will be redeemed on Sept. 18 at 102.938 plus accrued interest to the redemption date. The company said that holders may still participate in the tender offer and tender their notes by Sept. 27, even though the remaining notes have been called for redemption.

On Thursday DuPont Fabros also issued redemption notices for its 5.625% senior notes due 2023. The company expects to redeem 35% of the notes on Oct. 16 at 105.625 and the remainder on Oct. 17 at par plus a make-whole premium.

Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (866 924-2200) is the tender agent and information agent.

Digital Realty owns, acquires, develops and operates data centers and is based in San Francisco. DuPont Fabros is a Washington, D.C.-based real estate investment trust that focuses on wholesale data centers.

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