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): April 13, 2009

DIGITAL REALTY TRUST, INC.

(Exact name of registrant as specified in charter)

 

Maryland		001-32336		26-0081711
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

560 Mission Street, Suite 2900, San Francisco, CA 94105

(Address of principal executive offices) (Zip Code)

(415) 738-6500

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

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 (see General Instruction A.2. below):

 

¨	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))

 

 

 

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Item 1.01

Entry into a Material Definitive Agreement.

On April 20, 2009, Digital Realty Trust, L.P. (the “Operating Partnership”) issued $266.4 million aggregate principal amount of its 5.50% Exchangeable Senior Debentures due 2029 (the “Debentures”), including $6.4 million aggregate principal amount of Debentures to cover over-allotments. The terms of the Debentures are governed by an indenture, dated as of April 20, 2009 (the “Indenture”), by and among the Operating Partnership, as issuer, Digital Realty Trust, Inc. (the “Company”), as guarantor, and Wells Fargo Bank, National Association, as trustee. A copy of the Indenture, including the form of the Debentures, the terms of which are incorporated herein by reference, is attached as Exhibit 4.1 to this report. See Item 2.03 below for additional information.

The Debentures and the shares of common stock of the Company issuable upon exchange of the Debentures have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). The Operating Partnership offered and sold the Debentures to the initial purchasers of the Debentures (the “Initial Purchasers”) in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. The Initial Purchasers then sold the Debentures to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act.

On April 20, 2009, in connection with the issuance and sale of the Debentures, the Operating Partnership and the Company also entered into a registration rights agreement with Citigroup Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC in their capacity as representatives of the Initial Purchasers (the “Registration Rights Agreement”). A copy of the Registration Rights Agreement, the terms of which are incorporated herein by reference, is attached as Exhibit 10.1 to this report.

Pursuant to the Registration Rights Agreement, the Company has agreed that it will:

 

•

file a shelf registration statement (which shall be an automatic shelf registration statement if the Company is then a Well-Known Seasoned Issuer (“WKSI”)) with the Securities and Exchange Commission by January 15, 2010 to cover resales of the underlying shares of common stock of the Company issuable upon exchange of the Debentures;

 

•

if the Company is not a WKSI on January 15, 2010, use its reasonable efforts to have the registration statement declared effective by January 15, 2010; and

 

•

use its reasonable efforts to keep the registration statement effective until the earliest of:

 

•

the 20th trading day immediately following April 15, 2029 (the maturity date of the Debentures); and

 

•

the date on which there are no longer any Debentures or “restricted” shares (within the meaning of Rule 144 under the Securities Act) of common stock of the Company issued in exchange of the Debentures outstanding.

If the Company does not meet these deadlines then, subject to certain exceptions, liquidated damages will accrue on the Debentures to be paid semi-annually in arrears at a rate per year equal to 0.25% of the principal amount of Debentures to and including the 90^th day following such registration default and 0.50% of the principal amount thereafter, for the period during which the registration default is not cured.

 

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On April 20, 2009, the Operating Partnership issued $266.4 million aggregate principal amount of Debentures. The purchase price paid by the Initial Purchasers was 97.25% of the principal amount thereof, and the Initial Purchasers received discounts and commissions in an aggregate amount of approximately $7.3 million in connection with the issuance and sale of the Debentures. The Debentures are general unsecured senior obligations of the Operating Partnership and rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership. Interest is payable on April 15 and October 15 of each year beginning October 15, 2009 until the maturity date of April 15, 2029. The Operating Partnership’s obligations under the Debentures are fully and unconditionally guaranteed by the Company.

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The Debentures bear interest at 5.50% per annum and may be exchanged for shares of common stock of the Company at an initial exchange rate of 23.2558 shares per $1,000 principal amount of Debentures. At the initial exchange rate, the Debentures are exchangeable for common stock of the Company at an exchange price of $43.00 per share, representing an approximately 20.0% premium over the last reported sale price of the common stock of the Company on April 14, 2009, which was $35.83 per share.

Prior to April 18, 2014, the Operating Partnership may not redeem the Debentures except to preserve the Company’s status as a real estate investment trust for U.S. federal income tax purposes. On or after April 18, 2014, at the Operating Partnership’s option, the Debentures are redeemable in cash in whole or in part at 100% of the principal amount plus accrued and unpaid interest upon at least 30 days’ but not more than 60 days’ prior written notice to holders of the Debentures.

The holders of the Debentures have the right to require the Operating Partnership to repurchase the Debentures in cash in whole or in part on each of April 15, 2014, April 15, 2019 and April 15, 2024, and in the event of a designated event, for a repurchase price equal to 100% of the principal amount of the Debentures plus accrued and unpaid interest.

A “designated event” will be deemed to have occurred at the time that any of the following occurs:

 

•

consummation of any transaction or event (whether by means of a share exchange or tender offer applicable to shares of common stock of the Company, a liquidation, consolidation, recapitalization, reclassification, combination or merger of the Company or a sale, lease or other transfer of all or substantially all of the consolidated assets of the Company) or a series of related transactions or events pursuant to which all of the outstanding shares of common stock of the Company are exchanged for, converted into or constitute solely the right to receive cash, securities or other property more than 10% of which consists of cash, securities or other property that are not, or upon issuance will not be, traded on a national securities exchange;

 

•

any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, whether or not applicable), other than the Company, the Operating Partnership or any majority-owned subsidiary of the Company or the Operating Partnership or any employee benefit plan of the Company, the Operating Partnership or such subsidiary, is or becomes the “beneficial owner,” directly or indirectly, of more than 50% of the total voting power in the aggregate of all classes of capital stock of the Company then outstanding entitled to vote generally in elections of directors, other than pursuant to a transaction of the type contemplated by the preceding bullet that would be exempt from the definition of “designated event” pursuant to the preceding bullet (for the avoidance of doubt the ownership of Operating Partnership units will not be deemed to constitute beneficial ownership of capital stock of the Company);

 

•

during any period of 12 consecutive months after the date of original issuance of the debentures (for so long as the Company is the Operating Partnership’s general partner immediately prior to such transaction or series of related transactions), persons who at the beginning of such 12 month period constituted the board of directors of the Company, together with any new persons whose election was approved by a vote of a majority of the persons then still comprising the board of directors who were either members of the board of directors at the beginning of such period or whose election, designation or nomination for election was previously so approved, cease for any reason to constitute a majority of the board of directors of the Company; or

 

•

the Company (or any successor thereto permitted pursuant to the terms of the indenture) ceases to be the Operating Partnership’s general partner or ceases to control the Operating Partnership; provided, however, that the pro rata distribution by the Company to its stockholders of shares of its capital stock or shares of any of the Company’s other subsidiaries will not, in and of itself, constitute a designated event for purposes of this definition.

If a transaction described in the first bullet under the definition of a “designated event” above occurs prior to April 15, 2014 and a holder elects to exchange its Debentures in connection with such transaction, we will increase the applicable exchange rate for the Debentures surrendered for exchange by a number of additional shares of common stock of the Company as a “make whole premium.”

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Certain events are considered “Events of Default,” which may result in the accelerated maturity of the Debentures, including:

 

•

a default for 30 days in payment of any installment of interest under the Debentures;

 

•

a default in the payment of the principal amount or any repurchase price or redemption price due with respect to the Debentures;

 

•

the Operating Partnership’s failure to deliver shares of common stock of the Company within 15 days after the due date upon an exchange of the Debentures, together with any cash due in lieu of fractional shares of common stock of the Company;

 

•

the Operating Partnership’s failure to comply with any of its agreements in the Debentures or the Indenture upon receipt of notice of such default by the trustee or by holders of not less than 25% in aggregate principal amount of the Debentures then outstanding and the failure to cure (or obtain a waiver of) such default within 60 days after receiving notice of such failure;

 

•

failure to pay any indebtedness for money borrowed by the Operating Partnership, the Company, any subsidiary in which the Operating Partnership has invested at least $20 million in capital (a “Significant Subsidiary”) or any entity in which the Operating Partnership is the general partner in an outstanding principal amount in excess of $20 million at final maturity or upon acceleration after the expiration of any applicable grace period, which indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within 30 days after written notice to the Operating Partnership from the trustee (or to the Operating Partnership and the trustee from holders of at least 25% in principal amount of the outstanding Debentures);

 

•

the Operating Partnership’s failure to provide notice of a designated event; and

 

•

certain events of bankruptcy, insolvency or reorganization or court appointment of a receiver, liquidator or trustee of the Operating Partnership, the Company or any Significant Subsidiary or any substantial part of their respective property.

 

Item 3.02.

Unregistered Sales of Equity Securities.

The information contained in Items 1.01 and 2.03 of this report is incorporated herein by reference.

 

Item 8.01.

Other Events.

On April 13, 2009, the Company announced that the Operating Partnership commenced a private placement to qualified institutional buyers of the Debentures. The press release announcing the commencement of the private placement is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

On April 14, 2009, the Company announced that the Operating Partnership priced the private placement of the Debentures. The press release announcing the pricing of this private placement is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

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Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit Number		Description
4.1		Indenture, dated as of April 20, 2009, among Digital Realty Trust, L.P., as issuer, Digital Realty Trust, Inc., as guarantor, and Wells Fargo Bank, National Association, as trustee, including the form of 5.50% Exchangeable Senior Debentures due 2029.
10.1		Registration Rights Agreement, dated April 20, 2009, among Digital Realty Trust, L.P., Digital Realty Trust, Inc., Citigroup Capital Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC.
99.1		Press Release dated April 13, 2009 regarding the commencement of a private placement of exchangeable senior debentures due 2029.
99.2		Press Release dated April 14, 2009 regarding the pricing of a private placement of exchangeable senior debentures due 2029.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 20, 2009

 

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EXHIBIT INDEX

 

Exhibit Number		Description
4.1		Indenture, dated as of April 20, 2009, among Digital Realty Trust, L.P., as issuer, Digital Realty Trust, Inc., as guarantor, and Wells Fargo Bank, National Association, as trustee, including the form of 5.50% Exchangeable Senior Debentures due 2029.
10.1		Registration Rights Agreement, dated April 20, 2009, among Digital Realty Trust, L.P., Digital Realty Trust, Inc., Citigroup Capital Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC.
99.1		Press Release dated April 13, 2009 regarding the commencement of a private placement of exchangeable senior debentures due 2029.
99.2		Press Release dated April 14, 2009 regarding the pricing of a private placement of exchangeable senior debentures due 2029.