Digital Realty Trust Inc. ( DLR ), a
niche real estate investment trust (REIT), has recently augmented
its global revolving credit facility by $300 million to the tune of
$1.8 billion to increase its liquidity. The company exercised the
accordion feature of the credit facility to this effect.
BRANDYWINE RT (BDN): Free Stock Analysis Report
DIGITAL RLTY TR (DLR): Free Stock Analysis
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In accordance with its international presence, the credit facility
would enable Digital Realty to withdraw funds in U.S, Canadian,
Hong Kong, Singapore and Australian dollars, along with the Euro,
Pound Sterling, Swiss Franc, and Japanese Yen denominations.
The credit facility bears an annualized interest rate at 125 basis
points over the applicable index for floating rate advances. The
global credit facility is scheduled to mature in November 2015 with
a one-year extension option, and includes an accordion feature by
virtue of which the company can increase the borrowing capacity by
an additional $750 million at its own discretion.
The move is aimed to increase the financial flexibility of the
company and is consistent with its strategic objective of enhancing
its financial resources at the most favorable available price in
the market. Going forward, Digital Realty expects to utilize the
dry powder to fund both domestic and international acquisitions
that are in sync with its long-term investment objectives.
Digital Realty operates data centers and digital storage
facilities, which are primarily used by telecommunication companies
to maintain their Internet presence or augment their data networks.
Data centers usually incur high costs for building and maintenance,
and as such the supply is relatively inelastic.
Digital Realty primarily focuses on investing in institutional
quality data center facilities in high barriers-to-entry markets
with significant potential to generate attractive risk-adjusted
return on investments (ROI).
The company provides flexible and cost effective data center
facilities to a wide range of customers, including domestic and
international companies across multiple industry verticals. Its
portfolio includes 108 properties throughout Europe, North America,
Asia, and Australia spanning approximately 20.8 million square feet
(including 2.2 million square feet of redevelopment space).
We presently have a Neutral recommendation for Digital Realty,
which currently has a Zacks #3 Rank that translates into a
short-term Hold rating. We also have a Neutral recommendation and a
Zacks #2 Rank (short-term Buy rating) for Brandywine Realty
Trust ( BDN ), one of the competitors of Digital