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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
8-K
 
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 9, 2023
 
 
DIGITAL REALTY TRUST, INC.
DIGITAL REALTY TRUST, L.P.
(Exact name of registrant as specified in its charter)
 
 
 
         
Maryland
 
001-32336
 
26-0081711
Maryland
 
000-54023
 
20-2402955
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
   
5707 Southwest Parkway, Building 1, Suite 275
Austin, Texas
 
78735
(Address of principal executive offices)
 
(Zip Code)
(737)
281-0101
(Registrant’s telephone number, including area code)
 
 
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
 
Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
 
Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
 
         
Title of each class
  
Trading
symbol(s)
  
Name of each exchange
on which registered
Common Stock    DLR    New York Stock Exchange
Series J Cumulative Redeemable Preferred Stock    DLR Pr J    New York Stock Exchange
Series K Cumulative Redeemable Preferred Stock    DLR Pr K    New York Stock Exchange
Series L Cumulative Redeemable Preferred Stock    DLR Pr L    New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule
12b-2
of the Securities Exchange Act of 1934 (§
240.12b-2
of this chapter).
 
             
Digital Realty Trust, Inc.:        Emerging growth company  
       
Digital Realty Trust, L.P.:        Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Digital Realty Trust, Inc.:  ☐
Digital Realty Trust, L.P.:  ☐
 
 
 

Introductory Note
Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “our company,” “the company” or “Digital Realty” refer to Digital Realty Trust, Inc., together with its consolidated subsidiaries, including Digital Realty Trust, L.P., our “operating partnership.”
 
Item 1.01.
Entry into a Material Definitive Agreement.
As previously disclosed, on October 25, 2022, the company, the operating partnership, and certain of the operating partnership’s subsidiaries entered into an escrow agreement (the “Escrow Agreement”) with Bank of America, N.A., as administrative agent (the “Administrative Agent”), certain lenders (the “Lenders”), and Arnold & Porter Kaye Scholer LLP, as escrow agent (the “Escrow Agent”), pursuant to which the operating partnership, the company, the Administrative Agent and the Lenders delivered executed signature pages to a new term loan agreement among the operating partnership, the company, the Lenders and the Administrative Agent (the “Term Loan Agreement”) to be held in escrow by the Escrow Agent and released by the Escrow Agent upon satisfaction of the terms described therein as further described below.
On January 9, 2023, the terms and conditions of the Escrow Agreement were satisfied, and, on such date, the Term Loan was deemed executed and became effective.
The Term Loan Agreement provides for a $740 million senior unsecured term loan facility (the “Term Loan Facility”). The Term Loan Facility provides for borrowings in U.S. dollars. The Term Loan Facility will mature on March 31, 2025, subject to one twelve-month extension option at the operating partnership’s option; provided, that the operating partnership must pay a 0.1875% extension fee based on the then-outstanding principal amount of the term loans under the Term Loan Facility.
The Term Loan Facility provides that the term loans thereunder bear interest, at the operating partnership’s option, at a rate of (x) from the closing date through the initial maturity date, (i) a term SOFR-based or daily simple SOFR floating interest rate option plus an applicable margin based on the corporate credit rating of our long-term senior unsecured debt of between 0.80% and 1.60% per annum plus a credit spread adjustment of 0.10%, 0.15% or 0.25% (depending on the applicable term SOFR-based interest period) or 0.10% (for daily simple SOFR) or (ii) a base rate interest rate option plus an applicable margin based on the corporate credit rating of our long-term senior unsecured debt of between 0.00% and 0.60% or (y) following the extension of the maturity date, (i) a term SOFR-based or daily simple SOFR floating interest rate option plus an applicable margin based on the corporate credit rating of our long-term senior unsecured debt of between 0.95% and 1.75% per annum plus a credit spread adjustment of 0.10%, 0.15% or 0.25% (depending on the applicable term SOFR-based interest period) or 0.10% (for daily simple SOFR) or (ii) a base rate interest rate option plus an applicable margin based on the corporate credit rating of our long-term senior unsecured debt of between 0.00% and 0.75%. The applicable margin at closing applicable to the term loans under the Term Loan Facility based on a term SOFR-based floating interest rate is 0.95% per annum. We are also required to pay certain fees to the administrative agent under the Term Loan Facility. The Term Loan Facility may be voluntarily prepaid in whole or in part at any time without premium or penalty. Amounts borrowed under the Term Loan Facility and repaid or prepaid may not be reborrowed.
Borrowings under the Term Loan Agreement
ar
e
 
guaranteed by Digital Realty Trust, Inc., Digital Euro Finco, LLC and Digital Dutch Finco B.V. In specified circumstances, additional guarantors are required to be added. The Term Loan Agreement
contains
various restrictive covenants, including limitations on our ability to make certain investments or merge with another company, and requirements to maintain financial coverage ratios, including with respect to unencumbered assets. In addition, the Term Loan Agreement restricts Digital Realty Trust, Inc. from making distributions to its stockholders, or redeeming or otherwise repurchasing shares of its capital stock, after the occurrence and during the continuance of an event of default, except in limited circumstances including as necessary to enable Digital Realty Trust, Inc. to maintain its qualification as a REIT and to avoid the payment of income or excise tax. In addition, the Term Loan Agreement
includes
events (including, without limitation, a
non-payment
under the loans, a breach of warranties and representations in any material respect,
non-compliance
with covenants by a borrower, cross-default for payment defaults and cross-acceleration for other defaults under material debt or a change of control) which, if not cured within the time period, if any, specified in the Term Loan Agreement would constitute an event of default.

Upon the occurrence and continuance of any such event of default, the lenders holding more than a majority of the commitments and loans may elect to accelerate the outstanding principal and accrued and unpaid interest under the Term Loan Agreement. Further, outstanding principal and accrued and unpaid interest thereon automatically accelerate upon the entry of an order for relief with respect to any borrower under any bankruptcy, insolvency or other similar law.
Certain of the joint lead arrangers and joint bookrunners or their affiliates are customers of ours, and certain other lenders have other relationships with us.
The foregoing description of the Term Loan Agreement is qualified in its entirety by Exhibit 10.1 attached hereto.
 
Item 2.03.
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement of a Registrant.
The description of the Term Loan Agreement in Item 1.01 of this Form
8-K
is incorporated by reference into this Item 2.03.
 
Item 9.01.
Financial Statements and Exhibits.
(d) Exhibits.
 
     
Exhibit No.
  
Description
   
10.1
*
   Term Loan Agreement, dated as of January 9, 2023, among Digital Realty Trust, L.P., as borrower, Digital Realty Trust, Inc., Digital Dutch Finco B.V., Digital Euro Finco, LLC and the additional guarantors party thereto, Bank of America, N.A., as administrative agent and the lenders named therein.
   
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
*
Portions of this exhibit have been omitted because such portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
Date: January 13, 2023
 
     
   
Digital Realty Trust, Inc.
   
By:  
/s/ JEANNIE LEE
   
Jeannie Lee
   
Executive Vice President, General Counsel and Secretary
   
   
Digital Realty Trust, L.P.
   
By:   Digital Realty Trust, Inc.
    Its general partner
   
By:  
/s/ JEANNIE LEE
   
Jeannie Lee
   
Executive Vice President, General Counsel and Secretary
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