Business Context and Reporting Period
Company: Digital Realty Trust, Inc. and Digital Realty Trust, L.P.
Filing Type: Form 8-K (Current Report)
Date: June 13, 2011
Context: This filing serves as a Regulation FD disclosure regarding the distribution of notices to holders of specific debt and equity securities concerning adjustments to their exchange and conversion rates.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt totals, or liquidity metrics. The document focuses exclusively on the mechanics of securities adjustments.
Securities Adjustment Rates (as of June 13, 2011):
- 4.375% Series C Cumulative Convertible Preferred Stock: 0.5350 shares per $25.00 liquidation preference.
- 5.500% Series D Cumulative Convertible Preferred Stock: 0.6120 shares per $25.00 liquidation preference.
- 4.125% Exchangeable Senior Debentures due 2026: 32.2730 shares per $1,000 principal amount.
- 5.50% Exchangeable Senior Debentures due 2029: 23.9050 shares per $1,000 principal amount.
Material Changes
The material change disclosed is the adjustment of exchange rates for the Operating Partnership's 4.125% Exchangeable Senior Debentures due 2026 and 5.50% Exchangeable Senior Debentures due 2029, as well as conversion rates for the Company's Series C and Series D Convertible Preferred Stock. Notices of these adjustments were distributed to holders on or around June 13, 2011.
Guidance, Outlook, and Risks
Management Commentary: The filing contains no specific operational guidance or outlook beyond the execution of the rate adjustments. It includes a standard disclaimer regarding forward-looking statements, noting that actual results may differ due to various risks.
Risks and Contingencies: The filing lists extensive risks including:
- Deterioration in global economic, credit, and market conditions.
- Decreases in information technology spending and economic slowdowns.
- Tenant concentration risks, including bankruptcy or lease defaults.
- Financing risks, including interest rate increases and refinancing difficulties.
- Real estate valuation declines and impairment charges.
- Regulatory risks, including REIT status maintenance and tax law changes.
- Operational risks related to foreign jurisdictions and property development.
Investor Verification Checklist
- Verify the specific terms of the "Notice of Adjustment to Exchange Rate" attached as Exhibits 99.1 and 99.2.
- Confirm the impact of the new exchange rates (32.2730 and 23.9050 shares) on the conversion value of the 2026 and 2029 debentures relative to current stock prices.
- Review the most recent Form 10-K (year ended Dec 31, 2010) and Form 10-Q (quarter ended March 31, 2011) referenced in the risk factors for detailed financial performance.
- Monitor the company's ability to maintain REIT status and manage debt refinancing given the cited economic risks.