Digital Realty Trust, Inc. (
recently priced a private placement offering of guaranteed notes
worth $400 million. The notes, which are scheduled to
mature in 2025, will feature semi-annual interest payment at a
rate of 4.250% per annum. The company made the offering through
one of its operating partnership entity - Digital Realty Trust,
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With the cash generated from this offering, this real estate
investment trust (REIT) plans to pay back its debt outstanding
under the existing revolving credit facility, fund acquisitions,
use for development and redevelopment activities as well as for
other corporate purposes. Scheduled to close on Jan 18, 2013,
this offering is subject to the execution of the notes'
subscription agreement and customary closing conditions.
For Digital Realty, the offering would provide the company
financial flexibility. Moreover, the use of funds for strategic
acquisitions would help the company enhance its portfolio
quality, which in turn could be accretive to its earnings going
forward. Noteworthy acquisitions of Digital Realty in recent
months include an established data center at Macquarie Park in
New South Wales and a sprawling redevelopment property in New
Digital Realty is scheduled to release its fourth-quarter 2012
results on Feb 15, 2013, prior to the opening bell. The Zacks
Consensus Estimate for the company's fourth-quarter FFO (funds
from operations) is currently pegged at $1.16 per share.
The Earnings ESP (Expected Surprise Prediction), the percentage
difference between the Most Accurate Estimate and the Zacks
Consensus Estimate, for Digital Realty is +2.59%. This, combined
with its Zacks Rank #3, reflects that the company will definitely
beat the Zacks Consensus Estimate in the fourth quarter.
One of Digital Realty's peers,
DuPont Fabros Technology, Inc (
currently holds a Zacks Rank #2 (Buy).
Note: FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.