Digital Realty Announces Pricing of €850 million of Guaranteed Notes due 2034

Rhea-AI Summary

Digital Realty (NYSE: DLR) has announced the pricing of €850 million in Guaranteed Notes due 2034, issued through its subsidiary Digital Dutch Finco B.V. The notes carry a 3.875% annual interest rate and are priced at 99.137% of principal amount. The offering, scheduled to close on June 25, 2025, will be guaranteed by Digital Realty and its operating partnership. The proceeds will be used to temporarily repay revolving credit facilities, fund acquisitions, development opportunities, and other corporate purposes. The Euro Notes are being sold exclusively outside the United States under Regulation S and are not registered under the U.S. Securities Act, with specific restrictions for EEA and UK retail investors.

Positive

• Successful €850 million debt raising demonstrates strong market access and investor confidence
• Long-term debt maturity (2034) helps improve debt structure
• Funds can be used flexibly for growth opportunities including acquisitions and development
• Potential to reduce revolving credit facility debt and optimize capital structure

Negative

• Additional debt increases the company's leverage and interest expense obligations
• 3.875% interest rate adds to annual financial obligations
• Geographic exposure to Euro currency fluctuation risks

Insights

Corporate Bond Specialist

Digital Realty's €850M bond offering strengthens financial flexibility while diversifying funding sources at moderate interest costs.

Digital Realty's €850 million senior unsecured notes offering represents a strategic capital raising initiative that merits investor attention. The 3.875% interest rate for 10-year debt sits at a reasonable level given current European market conditions, demonstrating the company's solid credit position despite rising rate environments globally.

The 99.137% pricing relative to face value indicates modest investor demand – not at premium pricing but still reflecting adequate market confidence in DLR's long-term stability. This debt raising provides DLR with several strategic advantages:

• Immediate refinancing of revolving credit facilities, improving liquidity flexibility
• Currency diversification through euro-denominated debt, creating a natural hedge against European asset exposure
• Extension of debt maturity profile to 2034, reducing near-term refinancing pressure
• Potential acquisition and development funding that aligns with DLR's data center growth strategy

The use of a Dutch financing subsidiary highlights DLR's sophisticated international tax planning. By issuing debt exclusively outside the US under Regulation S, DLR is targeting European institutional investors while maintaining compliance with REIT requirements.

While increased leverage warrants monitoring, this offering likely represents an opportunistic financing move rather than a concerning debt burden. Digital Realty's position as the largest global data center provider gives it sufficient scale to support this additional debt obligation, particularly as data center demand continues growing alongside AI and cloud computing expansion.

DALLAS, June 17, 2025 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today that Digital Dutch Finco B.V., an indirect wholly owned finance subsidiary of the company's operating partnership, Digital Realty Trust, L.P., priced an offering of €850 million aggregate principal amount of 3.875% Guaranteed Notes due 2034 at a price of 99.137% of the principal amount.

The Euro Notes will be senior unsecured obligations of Digital Dutch Finco B.V. and will be fully and unconditionally guaranteed by the company and the operating partnership. Interest on the Euro Notes will be payable annually in arrears at a rate of 3.875% per annum from and including June 25, 2025 and will mature on July 15, 2034. Closing of the offering is expected to occur on June 25, 2025, subject to the satisfaction of customary closing conditions.

The company intends to use the net proceeds from the Euro Notes to temporarily repay borrowings outstanding under the operating partnership's global revolving credit facilities, acquire additional properties or businesses, fund development opportunities, invest in interest-bearing accounts and short-term, interest-bearing securities which are consistent with the company's intention to qualify as a REIT for U.S. federal income tax purposes, and to provide for working capital and other general corporate purposes, including potentially for the repayment of other debt, or the redemption, repurchase, repayment or retirement of outstanding equity or debt securities, or a combination of the foregoing.

The Euro Notes are being sold only outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Euro Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States or to United States persons (within the meaning of Regulation S under the Securities Act) absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the Euro Notes, nor shall there be any offer, solicitation or sale of the Euro Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Safe Harbor Statement

This 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 timing and consummation of the offering of the Euro Notes and the expected use of the net proceeds. The company can provide no assurances that it will be able to complete the offering on the anticipated terms, or at all. For a further list and description of such risks and uncertainties, see the company's reports and other filings with the U.S. Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2024 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. 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.

Reg S Statement

This communication is not an offer to sell or a solicitation of an offer to buy securities of Digital Realty Trust, Inc. or its subsidiaries. The securities have not been and will not be registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States. Consequently, the securities may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. Any offering of the securities will be conducted pursuant to Regulation S under the Securities Act.

Notice to EEA Investors

The Euro Notes are not intended to be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (the "EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive 2016/97/EU (as amended, the "IMD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. No key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling any in scope instrument or otherwise making such instruments available to retail investors in the EEA has been prepared. Offering or selling the Euro Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation. This communication has been prepared on the basis that any offers or sales of Euro Notes in any Member State of the EEA will be made pursuant to an exemption under Regulation (EU) 2017/1129 (as amended or superseded, the "Prospectus Regulation") from the requirement to publish a prospectus for offers or sales of Euro Notes. This communication is not a prospectus for the purposes of the Prospectus Regulation.

Notice to UK Investors

This announcement is for distribution only to, and is directed at, persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc.") of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.

The Euro Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA"); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000, as amended (the "FSMA") and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA ("UK MiFIR"). Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the Euro Notes or otherwise making them available to retail investors in the United Kingdom has been prepared and therefore offering or selling the Euro Notes or otherwise making them available to any retail investor in the United Kingdom may be unlawful under the UK PRIIPs Regulation.

Relevant stabilization regulations including FCA/ICMA apply. Manufacturer target market (MIFID II and UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs or UK PRIIPs key information document (KID) has been prepared as not available to retail in EEA or UK.

Investor Relations
Jordan Sadler / Jim Huseby
Digital Realty
(415) 275 5344
InvestorRelations@digitalrealty.com 

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SOURCE Digital Realty Trust

FAQ

What is the size and interest rate of Digital Realty's (DLR) new Euro Notes offering?

Digital Realty's Euro Notes offering is €850 million with a 3.875% annual interest rate, priced at 99.137% of principal amount.

When will Digital Realty's (DLR) Euro Notes mature?

The Euro Notes will mature on July 15, 2034.

How will Digital Realty (DLR) use the proceeds from the Euro Notes?

The proceeds will be used to repay revolving credit facilities, fund acquisitions, development opportunities, investments, working capital, and other corporate purposes including potential debt or equity repayment.

Are Digital Realty's (DLR) Euro Notes available to U.S. investors?

No, the Euro Notes are being sold only outside the United States in reliance on Regulation S and have not been registered under the U.S. Securities Act.

When is the closing date for Digital Realty's (DLR) Euro Notes offering?

The offering is expected to close on June 25, 2025, subject to customary closing conditions.