Debt of the Operating Partnership

12 Months Ended

Dec. 31, 2023

Debt of the Operating Partnership

Debt of the Operating Partnership

11. Debt of the Operating Partnership

All debt is currently held by the OP or its consolidated subsidiaries, and the Parent is the guarantor or co-guarantor of the Global Revolving Credit Facility and the Yen Revolving Credit Facility, the unsecured term loans and the unsecured senior notes. A summary of outstanding indebtedness is as follows (in thousands):

	December 31, 2023				December 31, 2022
	Weighted-				Weighted-
	average		Amount		average		Amount
	interest rate		Outstanding		interest rate		Outstanding
Global Revolving Credit Facilities	4.33	%	$	1,825,228	3.04	%	$	2,167,889
Unsecured term loans	4.76	%		1,567,925	2.49	%		802,875
Unsecured senior notes	2.24	%		13,507,427	2.44	%		13,220,961
Secured and other debt	8.07	%		637,072	7.12	%		532,130
Total	2.89	%	$	17,537,652	2.68	%	$	16,723,855

The weighted-average interest rates shown represent interest rates at the end of the periods for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rates on certain variable rate debt, along with cross-currency interest rate swaps, which effectively convert a portion of our U.S. dollar-denominated fixed-rate debt to foreign currency-denominated fixed-rate debt in order to hedge the currency exposure associated with our net investment in foreign subsidiaries.

We primarily borrow in the functional currencies of the countries where we invest. Included in the outstanding balances were borrowings denominated in the following currencies (in thousands, U.S. dollars):

	December 31, 2023				December 31, 2022
	Amount				Amount
Denomination of Draw	Outstanding		% of Total		Outstanding		% of Total
U.S. dollar ($)	$	2,784,875	15.9	%	$	3,855,903	23.1	%
British pound sterling (£)		1,973,305	11.2	%		1,929,051	11.5	%
Euro (€)		10,835,878	61.8	%		9,325,126	55.8	%
Other		1,943,594	11.1	%		1,613,775	9.6	%
Total	$	17,537,652			$	16,723,855

The table below summarizes our debt maturities and principal payments as of December 31, 2023 (in thousands):

	Global Revolving		Unsecured		Unsecured		Secured and
	Credit Facilities (1)(2)		Term Loans(3)(4)		Senior Notes		Other Debt		Total Debt
2024	$	—	$	—	$	980,615	$	321	$	980,936
2025		—		1,567,925		1,226,775		584		2,795,284
2026		1,825,228		—		1,513,519		110,791		3,449,538
2027		—		—		1,178,269		218,511		1,396,780
2028		—		—		2,101,950		293,775		2,395,725
Thereafter		—		—		6,506,299		13,090		6,519,389
Subtotal	$	1,825,228	$	1,567,925	$	13,507,427	$	637,072	$	17,537,652
Unamortized net discounts		—		—		(33,324)		(3,754)		(37,078)
Unamortized deferred financing costs		(12,941)		(7,620)		(51,761)		(2,345)		(74,667)
Total	$	1,812,287	$	1,560,305	$	13,422,342	$	630,973	$	17,425,907

(1) Includes amounts outstanding for the Global Revolving Credit Facilities.

(2) The Global Revolving Credit Facilities are subject to two six-month extension options exercisable by us; provided that the Operating Partnership must pay a 0.0625% extension fee based on each lender’s revolving commitments then outstanding (whether funded or unfunded).

(3) A €375.0 million senior unsecured term loan facility is subject to two maturity extension options of one year each, provided that the Operating Partnership must pay a 0.125% extension fee based on the then-outstanding principal amount of such facility commitments then outstanding. Our U.S. term loan facility of $740 million is subject to one twelve-month extension, provided that the Operating Partnership must pay a 0.1875% extension fee based on the then-outstanding principal amount of the term loans.

(4) On January 9, 2024, we paid down $240 million on the U.S. term loan facility, leaving $500 million outstanding. The paydown will result in an early extinguishment charge of approximately $1.1 million during the three months ending March 31, 2024.

Global Revolving Credit Facility

We have a Global Revolving Credit Facility under which we may draw up to $3.75 billion on a revolving basis (subject to currency fluctuations). The Global Revolving Credit Facility can be drawn in Australian dollars, British pounds sterling, Canadian dollars, Euros, Hong Kong dollars, Japanese yen, Singapore dollars, Indonesian rupiah, Swiss francs, Korean won and U.S. dollars (with the ability to add other currencies in the future).

On April 5, 2022, we entered into an amendment (the “Amendment”) to the Second Amended and Restated Global Senior Credit Agreement (the “Credit Agreement”). The Amendment provided for, among other things: (1) an increase in the size of the Global Revolving Credit Facility from $3.0 billion to $3.75 billion and (2) the transition from U.S. dollar London Interbank Offered Rate (LIBOR) to Term Secured Overnight Financing Rate (SOFR) for floating rate borrowings denominated in U.S. dollars for all purposes under the Credit Agreement.

We have the ability to increase the size of the Global Revolving Credit Facility by up to $750 million, subject to the receipt of lender commitments and other conditions precedent. Other key terms of the Global Revolving Credit Facility are as follows:

● Maturity date: January 24, 2026, with two six-month extension options available. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists under the Global Revolving Credit Facilities.

● Interest rate: the applicable index plus a margin which is based on the credit ratings of our long-term debt and is currently 85 basis points.

● Annual facility fee: based on the total commitment amount of the facility and the credit ratings of our long-term debt and is currently 20 basis points and is payable quarterly.

● Sustainability-linked pricing component: pricing can increase by up to 5 basis points or decrease by up to 5 basis points depending on whether or not the OP or its subsidiaries meet certain sustainability performance targets.

Yen Revolving Credit Facility

In addition to the Global Revolving Credit Facility, we have a revolving credit facility that provides for borrowings in Japanese Yen of up to ¥33.3 billion (approximately $236.0 million based on the exchange rate on December 31, 2023), hereafter referred to as the Yen Revolving Credit Facility. We have the ability from time to time to increase the size of the Yen Revolving Credit Facility to up to ¥93.3 billion (approximately $661.4 million based on the exchange rate on December 31, 2023), subject to receipt of lender commitments and other conditions precedent. Other key terms of the Yen Revolving Credit Facility are as follows:

● Maturity date: January 24, 2026, with two six-month extension options available. The bank group is obligated to grant the extension options provided we give proper notice, we make certain representations and warranties and no default exists under the Global Revolving Credit Facilities.

● Interest rate: the applicable index plus a margin which is based on the credit ratings of our long-term debt and is currently 50 basis points.

● Quarterly unused commitment fee: currently is 10 basis points, calculated using the average daily unused revolving credit commitment and is based on the credit ratings of our long-term debt.

● Sustainability-linked pricing component: pricing can increase by up to 5 basis points or decrease by up to 5 basis points depending on whether or not the OP or its subsidiaries meet certain sustainability performance targets.

Restrictive Covenants in Global Revolving Credit Facility and Yen Revolving Credit Facility

The Global Revolving Credit Facility and the Yen Revolving Credit Facility both contain various restrictive covenants, including limitations on our ability to incur additional indebtedness, make certain investments, or merge with another company. In addition, we are required to maintain financial coverage ratios, including with ratios respect to unencumbered assets. After the occurrence of and during the continuance of any event of default, these credit facilities restrict the Parent’s ability to make distributions to stockholders or redeem or otherwise repurchase shares of its capital stock, except in limited circumstances (such as those necessary to enable Digital Realty Trust, Inc. to maintain its qualification as a REIT and to minimize the payment of income or excise tax). As of December 31, 2023, we were in compliance with all of such covenants for both of these revolving credit facilities.

Unsecured Term Loans

Euro Term Loan Agreement

On August 11, 2022, the Company, the Operating Partnership, and certain of the Operating Partnership’s subsidiaries entered into a term loan agreement (the “Euro Term Loan Agreement”) which governs (i) a €375,000,000 three-year senior unsecured term loan facility (the “2025 Term Facility”), the entire amount of which was funded on such date, and (ii) a €375,000,000 five-year senior unsecured term loan facility (the “2025-27 Term Facility” and, together with the 2025 Term Facility, collectively, the “Euro Term Loan Facilities”), comprised of €125,000,000 of initial term loans, the entire amount of which was funded on such date, and €250,000,000 of delayed draw term loan commitments that were funded on September 9, 2023. The Euro Term Loan Facilities provide for borrowings in Euros. The 2025 Term Facility matures on August 11, 2025. The 2025-27 Term Facility matures on August 11, 2025, subject to two maturity extension options of one year each; provided that the Operating Partnership must pay a 0.125% extension fee based on the then-outstanding principal amount of the 2025-27 Term Facility commitments then outstanding.

USD Term Loan Agreement

On October 25, 2022, the Company, the Operating Partnership, and certain of the Operating Partnership’s subsidiaries entered into an escrow agreement (the “Escrow Agreement”) with Bank of America, N.A., as administrative agent (the “Administrative Agent”), certain lenders (the “Lenders”), and Arnold & Porter Kaye Scholer LLP, as escrow agent (the “Escrow Agent”), pursuant to which the Operating Partnership, the Company, the Administrative Agent and the Lenders delivered executed signature pages to a new term loan agreement among the Operating Partnership, the Company, the Lenders and the Administrative Agent (the “USD Term Loan Agreement”) to be held in escrow by the Escrow Agent and released by the Escrow Agent upon satisfaction of the terms described in the Escrow Agreement. On January 9, 2023, the terms and conditions of the Escrow Agreement were satisfied, and, on such date, the USD Term Loan Agreement was deemed executed and became effective. The USD Term Loan Agreement provides for a $740 million senior unsecured term loan facility (the “USD Term Loan Facility”). The USD Term Loan Facility provides for borrowings in U.S. dollars. The USD Term Loan Facility will mature on March 31, 2025, subject to one twelve-month extension option at the Operating Partnership’s option; provided, that the Operating Partnership must pay a 0.1875% extension fee based on the then-outstanding principal amount of the term loans under the USD Term Loan Facility.

Unsecured Senior Notes

The following table provides details of our unsecured senior notes (balances in thousands):

	Aggregate Principal Amount at Issuance					Balance as of
	Borrowing Currency		USD		Maturity Date	December 31, 2023		December 31, 2022
0.600% notes due 2023(1)	CHF	100,000	$	108,310	Oct 02, 2023	$	—	$	108,121
2.625% notes due 2024	€	600,000		677,040	Apr 15, 2024		662,340		642,300
2.750% notes due 2024	£	250,000		324,925	Jul 19, 2024		318,275		302,075
4.250% notes due 2025	£	400,000		634,480	Jan 17, 2025		509,240		483,320
0.625% notes due 2025	€	650,000		720,980	Jul 15, 2025		717,535		695,825
2.500% notes due 2026	€	1,075,000		1,224,640	Jan 16, 2026		1,186,693		1,150,788
0.200% notes due 2026	CHF	275,000		298,404	Dec 15, 2026		326,826		297,331
1.700% notes due 2027	CHF	150,000		162,465	Mar 30, 2027		178,269		162,181
3.700% notes due 2027(2)	$	1,000,000		1,000,000	Aug 15, 2027		1,000,000		1,000,000
5.550% notes due 2028(2)	$	900,000		900,000	Jan 15, 2028		900,000		900,000
1.125% notes due 2028	€	500,000		548,550	Apr 09, 2028		551,950		535,250
4.450% notes due 2028	$	650,000		650,000	Jul 15, 2028		650,000		650,000
0.550% notes due 2029	CHF	270,000		292,478	Apr 16, 2029		320,884		291,925
3.600% notes due 2029	$	900,000		900,000	Jul 01, 2029		900,000		900,000
3.300% notes due 2029	£	350,000		454,895	Jul 19, 2029		445,585		422,905
1.500% notes due 2030	€	750,000		831,900	Mar 15, 2030		827,925		802,875
3.750% notes due 2030	£	550,000		719,825	Oct 17, 2030		700,205		664,565
1.250% notes due 2031	€	500,000		560,950	Feb 01, 2031		551,950		535,250
0.625% notes due 2031	€	1,000,000		1,220,700	Jul 15, 2031		1,103,900		1,070,500
1.000% notes due 2032	€	750,000		874,500	Jan 15, 2032		827,925		802,875
1.375% notes due 2032	€	750,000		849,375	Jul 18, 2032		827,925		802,875
						$	13,507,427	$	13,220,961
Unamortized discounts, net of premiums							(33,324)		(37,280)
Deferred financing costs, net							(51,761)		(63,648)
Total unsecured senior notes, net of discount and deferred financing costs						$	13,422,342	$	13,120,033

(1) Paid in full at maturity on October 2, 2023.

(2) Subject to cross-currency swaps.

Restrictive Covenants in Unsecured Senior Notes

The indentures governing our senior notes contain certain covenants, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 40% and (3) an interest coverage ratio of greater than 1.50. The covenants also require us to maintain total unencumbered assets of not less than 150% of the aggregate principal amount of unsecured debt. At December 31, 2023, we were in compliance with each of these financial covenants.

Early Extinguishment of Unsecured Senior Notes

We recognized the following losses on early extinguishment of unsecured notes:

● During the year ended December 31, 2022: $51.1 million primarily due to redemption of the 4.750% Notes due 2025 in February 2022.

● During the year ended December 31, 2021: $18.3 million primarily due to redemption of the 2.750% Notes due 2023 in February 2021.

Secured and Other Debt

This amount consists of a variety of loans at fixed and floating rates ranging from 3.29% to 11.65%. The largest component of the balance are Teraco debt facilities in the amount of $413.8 million, with an effective interest rate of 9.36%, along with a $135.0 million mortgage loan for the Company’s Westin building in Seattle – which bears interest at 3.29%. The loan bearing interest at 11.65% is an unsecured loan with a balance of less than $10 million.