US data centre operator Digital Realty (NYSE:DLR) has priced US$950m of senior notes to help fund its US$1.9bn purchase of smaller rival Telx Holdings.
US data centre operator Digital Realty (NYSE:DLR) has priced US$950m of senior notes to help fund its US$1.9bn purchase of smaller rival Telx Holdings.
The private placement, made via subsidiary Digital Delta Holding, consists of US$500m of 3.4% notes due 2020, which priced at 99.777%, and US$450m of 4.75% notes due 2025, which priced at par.
The notes will be fully guaranteed by Digital Realty Trust and its operating partner subsidiary, Digital Realty Trust LP.
Proceeds are expected to be used to help fund the Telx purchase, announced in mid-July. San Francisco-based Digital Realty has said it expects the acquisition to close this year.
BofA Merrill Lynch and Morgan Stanley are Digital Realty’s financial advisers on the Telx acquisition, while Latham & Watkins is providing legal counsel.
Digital Realty had already received a commitment from a syndicate of lenders for a US$1.85bn unsecured term loan bridge facility to help fund the purchase, if needed.
The company expects the acquisition to double its footprint in the co-location space and grant its customers access to “a leading interconnection platform”.
As of 31 March, New York-based Telx managed 1.3 million square feet of data centre space operating out of 20 facilities in 13 US metro areas. Telx owns two of these facilities, 12 are leased, or partly leased, from Digital Realty and six are leased from third parties.