Digital Realty Prices Common Stock Offering

SAN FRANCISCO, May 17, 2016 /PRNewswire/ -- Digital Realty Trust, Inc. (NYSE: DLR), a leading global provider of data center, colocation and interconnection solutions, announced today that it has priced an underwritten registered public offering of 12,500,000 shares of its common stock, all of which are being offered in connection with the forward sales agreements described below, at a price of $96.00 per share.  The forward purchasers (as defined below) also granted the underwriters a 30-day option to purchase up to an additional 1,875,000 shares of the company's common stock.  The offering is expected to close on May 20, 2016, subject to customary closing conditions.  

BofA Merrill Lynch, Citigroup, and J.P. Morgan are the joint book-running managers for the offering.  Barclays, Credit Suisse, Deutsche Bank Securities, Morgan Stanley, Wells Fargo Securities, BTIG, LLC, SMBC Nikko, Scotiabank, MUFG, and TD Securities are book-running managers for the offering, and Raymond James, BBVA, Mizuho Securities, PNC Capital Markets LLC, RBC Capital Markets, SunTrust Robinson Humphrey and BB&T Capital Markets are co-managers for the offering.

The company has entered into forward sale agreements with Bank of America, N.A., Citibank, N.A. and JPMorgan Chase Bank, N.A. (the "forward purchasers") with respect to 12,500,000 shares of its common stock (or an aggregate of 14,375,000 shares of the company's common stock if the underwriters exercise their option to purchase additional shares in full).  In connection with the forward sale agreements, the forward purchasers or their affiliates are expected to borrow and sell to the underwriters an aggregate of 12,500,000 shares of the common stock (or an aggregate of 14,375,000 shares of the company's common stock if the underwriters exercise their option to purchase additional shares in full) that will be delivered in this offering.  Subject to its right to elect cash or net share settlement and subject to certain conditions, the company intends to deliver, upon physical settlement of such forward sale agreements on one or more dates specified by the company occurring no later than May 19, 2017, an aggregate of 12,500,000 shares of its common stock (or an aggregate of 14,375,000 shares of the company's common stock if the underwriters exercise their option to purchase additional shares in full) to the forward purchasers in exchange for cash proceeds per share equal to the applicable forward sale price, which will be the public offering price, less underwriting discounts and commissions, and will be subject to certain adjustments as provided in the forward sale agreements.  

Upon any exercise of the underwriters' 30-day option to purchase up to an additional 1,875,000 shares of the company's common stock, the number of shares of the company's common stock underlying each forward sale agreement will be increased by the number of shares sold by the applicable forward seller in respect of such option exercise.

The company will not initially receive any proceeds from the sale of shares of its common stock by the forward purchasers.  The company expects to use a portion of the net proceeds, if any, it receives upon the future settlement of the forward sale agreements to fund its previously-announced pending acquisition of a portfolio of data center assets from Equinix and to use any remaining net proceeds for general corporate purposes, including the repayment of outstanding indebtedness, the repurchase, redemption or retirement of outstanding debt or preferred equity securities, and the funding of development and acquisition opportunities.  Selling common stock through the forward sale agreements enables the company to set the price of such shares upon pricing the offering (subject to certain adjustments), while delaying the issuance of the shares and the receipt of the net proceeds by the company until the expected closing of the pending acquisition. 

The offering is being made pursuant to an effective shelf registration statement (containing a prospectus) that has been filed with the Securities and Exchange Commission.  A preliminary prospectus supplement relating to the offering was filed with the SEC and is available on the SEC's website at http://www.sec.gov.  A copy of the final prospectus supplement and accompanying prospectus relating to the offering may be obtained when available by contacting BofA Merrill Lynch, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte NC  28255-0001, Attn: Prospectus Department or by email at [email protected], Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 (tel: 800-831-9146), or J.P. Morgan, Attn: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, (tel: 866-803‐9204). 

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or other jurisdiction. 

For Additional Information

About Digital RealtyDigital Realty Trust, Inc. supports the data center and colocation strategies of more than 1,000 firms across its secure, network-rich portfolio of data centers located throughout North America, Europe, Asia and Australia.  Digital Realty's clients include domestic and international companies of all sizes, ranging from financial services, cloud and information technology services, to manufacturing, energy, gaming, life sciences and consumer products.  

Safe Harbor StatementThis press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to the acquisition of the portfolio of data center assets from Equinix, completion and timing of the offering, the expected physical settlement of the forward sale agreements, and use of proceeds.  These risks and uncertainties include, among others, the following: the impact of current global economic, credit and market conditions; current local economic conditions in the geographies in which we operate; decreases in information technology spending, including as a result of economic slowdowns or recession; adverse economic or real estate developments in our industry or the industry sectors that we sell to (including risks relating to decreasing real estate valuations and impairment charges); our dependence upon significant tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; defaults on or non-renewal of leases by tenants; our failure to obtain necessary debt and equity financing; risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements; financial market fluctuations; changes in foreign currency exchange rates; our inability to manage our growth effectively; difficulty acquiring or operating properties in foreign jurisdictions; the occurrence of any event, change or other circumstance that would compromise our ability to complete the acquisition of the portfolio of data center assets from Equinix within the expected timeframe or at all; our failure to successfully integrate and operate acquired or developed properties or businesses, including the portfolio of data center assets from Equinix; the suitability of our properties and data center infrastructure, delays or disruptions in connectivity, failure of our physical infrastructure or services or availability of power; risks related to joint venture investments, including as a result of our lack of control of such investments; delays or unexpected costs in development of properties; decreased rental rates, increased operating costs or increased vacancy rates; increased competition or available supply of data center space; our inability to successfully develop and lease new properties and development space; difficulties in identifying properties to acquire and completing acquisitions; our inability to acquire off-market properties; our inability to comply with the rules and regulations applicable to reporting companies; our failure to maintain our status as a REIT; possible adverse changes to tax laws; restrictions on our ability to engage in certain business activities; environmental uncertainties and risks related to natural disasters; losses in excess of our insurance coverage; changes in foreign laws and regulations, including those related to taxation and real estate ownership and operation; and changes in local, state and federal regulatory requirements, including changes in real estate and zoning laws and increases in real property tax rates.  For a further list and description of such risks and uncertainties, see the reports and other filings by the company with the U.S. Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended December 31, 2015, as amended, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.  The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 

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SOURCE Digital Realty Trust, Inc.