Key Takeaways
- • Digital Realty amended, extended and upsized its global revolving credit facility from $2.35 billion to $3 billion, maturing January 2027 with two six-month extension options and an accordion of up to $1.5 billion.
- • The global facility now carries sustainability-linked pricing, with margins adjusted against annual performance targets; the company's 2020 ESG report targets 68% and 24% reductions in Scope 1 & 2 and Scope 3 emissions by 2030 versus a 2018 baseline.
- • Digital Realty also amended its ¥33.3 billion (approximately $290 million) yen revolving facility, with a further ¥60 billion (approximately $525 million) upsize option.
- • Digital Realty filed a preliminary prospectus for a $235 million IPO of Digital Core REIT, a Singapore-listed REIT seeded with ten North American data center assets valued at $1.49 billion.
- • Digital Realty will co-invest 10% in all future Core REIT acquisitions, and Core REIT receives a global right of first refusal on a number of properties.
Summary
Digital Realty has amended, extended and upsized its existing global revolving credit facility from $2.35 billion to $3 billion, according to the company. The facility matures in January 2027, assuming the exercise of two six-month extension options, and the company holds the ability to increase it by up to $1.5 billion. The facilities now include a sustainability-linked pricing component, with pricing subject to adjustment based on annual performance targets. The company did not disclose those targets, but its 2020 ESG report states an aim to cut Scope 1 & 2 emissions by 68% and Scope 3 emissions by 24% by 2030 against a 2018 baseline.
Digital Realty president and CFO Andrew Power said the company was pleased by support from the global lending community for the recast, adding that the outcome reflects institutional lenders' view of the strength of its balance sheet and underlying business. BofA Securities and Citibank, N.A. are co-sustainability structuring agents for the global facility, while Sumitomo Mitsui Banking Corporation is sustainability structuring agent for the yen facility. Bank of America's global environmental executive Alex Liftman praised the company's leadership in using the sustainability-linked loan market.
Separately, Digital Realty amended and extended its ¥33.3 billion (approximately $290 million) yen-denominated revolving facility on the same January 2027 maturity profile, with an option to upsize by up to an additional ¥60 billion (approximately $525 million).
Digital Realty also filed a preliminary prospectus for the $235 million IPO of Digital Core REIT on the Singapore exchange. The seed portfolio comprises ten freehold data center assets across the US and Canada in Northern Virginia, Northern California, Los Angeles and Toronto, totaling more than 1.2 million sq ft and 49MW, valued at $1.49 billion. All assets except Toronto are fully leased and stabilized on a long-term basis, with leases of four to 10+ years. Digital Realty said Core REIT will indirectly hold a 90% interest in each property, with the sponsor retaining 10%. The company will co-invest 10% in all future acquisitions, and Core REIT will hold a global right of first refusal on a number of properties. John Stewart and Daniel Tith have been named CEO and CFO of the new vehicle. Bloomberg first reported the potential Singapore listing in June, and Digital Realty confirmed it in October; on its Q3 2021 earnings call, Power described the vehicle as analogous to a joint venture and a private capital partner for stabilized core assets.
Digital Realty president and CFO Andrew Power said the company was pleased by support from the global lending community for the recast, adding that the outcome reflects institutional lenders' view of the strength of its balance sheet and underlying business. BofA Securities and Citibank, N.A. are co-sustainability structuring agents for the global facility, while Sumitomo Mitsui Banking Corporation is sustainability structuring agent for the yen facility. Bank of America's global environmental executive Alex Liftman praised the company's leadership in using the sustainability-linked loan market.
Separately, Digital Realty amended and extended its ¥33.3 billion (approximately $290 million) yen-denominated revolving facility on the same January 2027 maturity profile, with an option to upsize by up to an additional ¥60 billion (approximately $525 million).
Digital Realty also filed a preliminary prospectus for the $235 million IPO of Digital Core REIT on the Singapore exchange. The seed portfolio comprises ten freehold data center assets across the US and Canada in Northern Virginia, Northern California, Los Angeles and Toronto, totaling more than 1.2 million sq ft and 49MW, valued at $1.49 billion. All assets except Toronto are fully leased and stabilized on a long-term basis, with leases of four to 10+ years. Digital Realty said Core REIT will indirectly hold a 90% interest in each property, with the sponsor retaining 10%. The company will co-invest 10% in all future acquisitions, and Core REIT will hold a global right of first refusal on a number of properties. John Stewart and Daniel Tith have been named CEO and CFO of the new vehicle. Bloomberg first reported the potential Singapore listing in June, and Digital Realty confirmed it in October; on its Q3 2021 earnings call, Power described the vehicle as analogous to a joint venture and a private capital partner for stabilized core assets.
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