Digital Realty Upsizes Revolving Credit Facilities, Boosts Flexibility

Core Viewpoint - Digital Realty (DLR) has successfully refinanced and upsized its revolving credit facilities to $4.5 billion, enhancing its financial flexibility and supporting long-term growth initiatives [1][5]. Financial Flexibility - DLR has amended its existing $3.75 billion multi-currency global unsecured revolving credit facility to $4.2 billion, an increase of $450 million, maturing in January 2029 with a potential one-year extension [1][2]. - The company can extend its global revolving credit facility by an additional $1.8 billion, which includes incremental term loan capacity [2]. - DLR has also increased its Japanese yen-denominated senior unsecured revolving credit facility from ¥33.285 billion to ¥42.511 billion (approximately $297 million), with an interest rate of 50 basis points over the applicable index for floating rate advances [3][5]. Balance Sheet Strength - As of the second quarter of 2024, DLR reported cash and cash equivalents of $2.82 billion, with a well-laddered debt maturity schedule averaging 4.0 years and a 2.9% weighted average coupon [6]. - The refinancing and upsizing of credit facilities are indicative of DLR's solid balance sheet and its proactive capital management strategy aimed at long-term growth [5][6]. Market Position - The data center REIT sector is experiencing significant growth due to the rise of cloud computing, the Internet of Things, and Big Data, with many companies opting for third-party IT infrastructure [8]. - DLR is well-positioned to capitalize on this demand, supported by its strategic acquisitions, development efforts, and a diversified investment-grade customer base [9]. Stock Performance - DLR's shares have increased by 19.2% year-to-date, outperforming the industry average of 9.8% [6].