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Digital Realty Prices Public Offering

SAN FRANCISCO-The underwritten offering will generate approximately $334 million in net proceeds. The preferred stock will pay dividends quarterly at a rate of 5.5% per year.

By Brian K. Miller | Updated on February 01, 2008

SAN FRANCISCO-Digital Realty Trust has priced its underwritten public offering of 12 million shares of Series D Cumulative Convertible Preferred Stock at $24.25 per share that including over-allotment shares will generate net proceeds of more than $333 million. The shares will be convertible for shares of Digital Realty Trust common stock and will pay dividends quarterly at a rate of 5.5% per year.

The preferred shares will be convertible, at the holder’s option, at an initial conversion rate of 0.5955 common shares per $25.00 liquidation preference per preferred share (or an initial conversion price of $41.98 per common share), subject to adjustment upon the occurrence of certain events. The initial conversion price represents a 17.5% conversion premium over the closing sale price of the company’s common shares on Jan. 31, 2008 on the New York Stock Exchange, which was $35.73 per share.

Assuming underwriters Citi and Credit Suisse Securities (USA) LLC need the additional 1.8 million shares that will be offered up to cover over-allotments, the estimated net proceeds will be $333.6 million. The proceeds will be used to repay borrowings under its credit facility. It will then use the freed-up credit to for upcoming acquisitions, developments and redevelopment. The company says it is “actively pursuing multiple opportunities for potential acquisitions, with due diligence and negotiations at different stages of advancement.”

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