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SAN FRANCISCO-Digital Realty Trust on Tuesday sold seven million shares of its 4.375% series C cumulative convertible preferred stock at $25 apiece. Including a 1.05-million-share over-allotment option held by underwriter Credit Suisse Securities (USA) LLC that is expected to be exercised, gross proceeds from the offering are expected to be just over $200 million.

After deducting discounts, commissions and estimated expenses, Digital Realty estimates its proceeds from this offering will range from $169.1 million to $194.6 million depending on the extent to which the over-allotment option is exercised. The company intends to utilize the net proceeds from the offering to pay down borrowings under its unsecured credit facility, to fund acquisitions, to fund redevelopment activities and for general corporate purposes.

The preferred stock will pay dividends quarterly at a rate of 4.375% per year. The preferred shares will be convertible, at the holder's option, at an initial conversion rate of 0.5164 common shares per $25 liquidation preference per preferred share (or an initial conversion price of $48.41 per common share), subject to adjustment upon the occurrence of certain events. The initial conversion price represents a 20% conversion premium over the $40.34 closing sale price of the company's common shares when the sale was announced on April 3.