By Stephanie N. Rotondo
Portland, Ore., Sept. 8 - Digital Realty Trust Inc. priced $250 million of 7% series E cumulative redeemable perpetual preferred stock (/BB+/), the company said in a press release Thursday.
The market had been expecting a $100 million issue at 7.125%, according to traders.
The real estate investment trust will issue 10 million preferreds at $25 each. There is also an over-allotment option for 1.5 million preferreds, or $37.5 million.
Dividends will be payable quarterly on the last day of March, June, September and December.
The company will have the option to call the preferreds at par plus accrued dividends after 2016 or in the event of a change of control. In the event of a change of control, holders will also have the right to convert the preferreds into common equity.
There is no stated maturity, and the preferreds are not subject to any sinking fund.
Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunning managers. Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Raymond James & Associates Inc. are the lead managers. RBC Capital Markets LLC and Stifel, Nicolaus & Co. Inc. are the co-managers.
The deal is expected to close Sept. 15.
Proceeds from the preferred sale will be contributed to the company's operating partnership, Digital Realty Trust, LP, which will use the funds to temporarily repay borrowings under its revolving credit facility, to acquire additional properties, to fund development and redevelopment opportunities, for general corporate purposes, including potentially for the repurchase, redemption or retirement of outstanding debt or preferred equity securities, or a combination thereof.
Digital Realty has applied to list the preferreds on the New York Stock Exchange under the ticker symbol "DLRPrE."
Digital Realty is based in San Francisco.
| Issuer: | Digital Realty Trust Inc.
|
| Securities: | Series E cumulative redeemable perpetual preferred stock
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| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Preferreds: | 10 million
|
| Price: | $25
|
| Dividends: | 7%, payable quarterly
|
| Call option: | After Sept. 15, 2016 or in the event of a change of control
|
| Joint bookrunners: | Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC
|
| Lead managers: | Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Raymond James & Associates Inc.
|
| Co-managers: | RBC Capital Markets LLC and Stifel, Nicolaus & Co. Inc.
|
| Pricing date: | Sept. 8
|
| Settlement date: | Sept. 15
|
| Rating: | Standard & Poor's: BB+
|
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