Debt

Debt Summary as of June 30, 2013 and December 31, 2012

($ in thousands)



	June 30, 2013							December 31, 2012
	Amounts		% of Total		Rates		Maturities (years)	Amounts
Secured	$	115,000	16	%	2.0	%	4.7	$	139,600
Unsecured	610,000		84	%	7.9	%	3.7	568,000
Total	$	725,000	100	%	6.9	%	3.8	$	707,600
Fixed Rate Debt:
Unsecured Notes	$	550,000	76	%	8.5	%	3.8	$	550,000
Fixed Rate Debt	550,000		76	%	8.5	%	3.8	550,000
Floating Rate Debt:
Unsecured Credit Facility	60,000		8	%	2.0	%	2.7	18,000
ACC3 Term Loan	115,000		16	%	2.0	%	4.7	—
ACC5 Term Loan	—		—	%	—	%	—	139,600
Floating Rate Debt	175,000		24	%	2.0	%	4.1	157,600
Total	$	725,000	100	%	6.9	%	3.8	$	707,600


Note:	The Company capitalized interest and deferred financing cost amortization of $0.3 million and $0.5 million during the three and six months ended June 30, 2013, respectively.

Outstanding Indebtedness

ACC3 Term Loan

On March 27, 2013, the Company entered into a $115 million term loan facility (the “ACC3 Term Loan”). The ACC3 Term Loan matures on March 27, 2018 and the borrower, a subsidiary of the Company, may elect to have borrowings under the facility bear interest at (i) LIBOR plus 1.85% or (ii) the greater of (a) the base rate, which is the greater of KeyBank National Association's prime rate and 0.5% above the Federal Reserve Bank of Cleveland's rate, plus in each case 0.85%, and (b) the 30-day LIBOR plus 1.85%. The interest rate is currently at LIBOR plus 1.85%. The Company may prepay the ACC3 Term Loan at any time, in whole or in part, without penalty or premium.

The loan is secured by the ACC3 data center and an assignment of the lease agreement between the Company and the tenant of ACC3. The Operating Partnership has guaranteed the outstanding principal amount of the ACC3 Term Loan, plus interest and certain costs under the loan.

The ACC3 Term Loan imposes financial maintenance covenants relating to, among other things, the following matters:


•	consolidated total indebtedness of the Operating Partnership not exceeding 60% of gross asset value of the Operating Partnership;


•	fixed charge coverage ratio of the Operating Partnership being not less than 1.70 to 1.00;


•	tangible net worth of the Operating Partnership being not less than $1.3 billion plus 80% of the sum of (i) net equity offering proceeds and (ii) the value of equity interests issued in connection with a contribution of assets to the Operating Partnership or its subsidiaries; and


•	debt service coverage ratio of the borrower not less than 1.50 to 1.00.

The Company was in compliance with all of the covenants under the loan as of June 30, 2013.

Unsecured Notes

On December 16, 2009, the Operating Partnership completed the sale of $550 million of 8.5% senior notes due 2017 (the “Unsecured Notes”). The Unsecured Notes were issued at face value. The Company pays interest on the Unsecured Notes semi-annually, in arrears, on December 15 and June 15 of each year. On each of December 15, 2015 and December 15, 2016, $125 million in principal amount of the Unsecured Notes will become due and payable, with the remaining $300 million due on December 15, 2017.

At any time prior to December 15, 2013, the Operating Partnership may redeem the Unsecured Notes, in whole or in part, at a price equal to the sum of (i) 100% of the principal amount of the Unsecured Notes to be redeemed, plus (ii) a make-whole premium and accrued and unpaid interest. The notes may be redeemed at the option of the Operating Partnership, in whole or in part, at any time, on and after December 15, 2013 at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the 12-month period commencing December 15 of the years indicated below, in each case together with accrued and unpaid interest to the date of redemption:



Year	Redemption Price
2013	104.250	%
2014	102.125	%
2015 and thereafter	100.000	%

The Unsecured Notes are unconditionally guaranteed, jointly and severally on a senior unsecured basis by DFT and certain of the Operating Partnership’s subsidiaries, including the subsidiaries that own the ACC2, ACC4, ACC5, ACC6, VA3, VA4, CH1, NJ1 and SC1 data centers and the SC2 parcels of land (collectively, the “Subsidiary Guarantors”), but excluding the subsidiaries that own the ACC3 data center facility, the ACC7 data center under development, the ACC8 parcel of land and the Company’s taxable REIT subsidiary (“TRS”), DF Technical Services, LLC.

The Company was in compliance with all covenants under the Unsecured Notes as of June 30, 2013.

Unsecured Credit Facility

In June 2013, the Company exercised the accordion feature on its unsecured revolving credit facility, resulting in an increase in total commitment from $225 million to $400 million. The maturity date of the facility is March 21, 2016, with a one-year extension option, subject to the payment of an extension fee equal to 25 basis points on the total commitment in effect on the maturity date and certain other customary conditions.

Under the terms of the facility, the Company may elect to have borrowings under the facility bear interest at either LIBOR or a base rate, which is based on the lender's prime rate, in each case plus an applicable margin. Prior to the Company's Unsecured Notes receiving an investment grade credit rating, the applicable margin added to LIBOR and the base rate is based on the table below.



		Applicable Margin
Pricing Level	Ratio of Total Indebtedness to Gross Asset Value	LIBOR Rate Loans		Base Rate Loans
Level 1	Less than or equal to 35%	1.85	%	0.85	%
Level 2	Greater than 35% but less than or equal to 40%	2.00	%	1.00	%
Level 3	Greater than 40% but less than or equal to 45%	2.15	%	1.15	%
Level 4	Greater than 45% but less than or equal to 52.5%	2.30	%	1.30	%
Level 5	Greater than 52.5%	2.50	%	1.50	%

As of June 30, 2013, the applicable margin was set at pricing level 1. The terms of the facility provide for the adjustment of the applicable margin from time to time according to the ratio of the Operating Partnership’s total indebtedness to gross asset value in effect from time to time.

The terms of the facility also provide that, in the event that the Company's Unsecured Notes receive an investment grade credit rating, borrowings under the facility will bear interest based on the table below.



		Applicable Margin
Credit Rating Level	Credit Rating	LIBOR Rate Loans		Base Rate Loans
Level 1	Greater than or equal to A- by S&P or A3 by Moody’s	1.05	%	0.05	%
Level 2	Greater than or equal to BBB+ by S&P or Baa1 by Moody’s	1.20	%	0.20	%
Level 3	Greater than or equal to BBB by S&P or Baa2 by Moody’s	1.35	%	0.35	%
Level 4	Greater than or equal to BBB- by S&P or Baa3 by Moody’s	1.50	%	0.50	%
Level 5	Less than BBB- by S&P or Baa3 by Moody’s	2.10	%	1.10	%

Following the receipt of such investment grade rating, the terms of the facility provide for the adjustment of the applicable margin from time to time according to the rating then in effect.

The facility is unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company and all of the Operating Partnership’s subsidiaries that currently guaranty the obligations under the Company’s Indenture governing the terms of the Unsecured Notes, listed above.

The amount available for borrowings under the facility is determined according to a calculation comparing the value of certain unencumbered properties designated by the Operating Partnership at such time relative to the amount of the Operating Partnership's unsecured debt. Up to $35 million of the borrowings under the facility may be used for letters of credit.

In June 2013, the Company amended its unsecured credit facility to provide for an option to increase the total commitment under the facility to $600 million, if one or more lenders commit to being a lender for the additional amount and certain other customary conditions are met.

As of June 30, 2013, $60.0 million was outstanding under the facility, with no letters of credit. As of the date of this report, $80.0 million was outstanding under the facility, with no letters of credit.

The facility requires that the Company, the Operating Partnership and their subsidiaries comply with various covenants, including with respect to restrictions on liens, incurring indebtedness, making investments, effecting mergers and/or asset sales, and certain limits on dividend payments, distributions and purchases of the Company's stock. In addition, the facility imposes financial maintenance covenants relating to, among other things, the following matters:


•	unsecured debt not exceeding 60% of the value of unencumbered assets;


•	net operating income generated from unencumbered properties divided by the amount of unsecured debt being not less than 12.5%;


•	total indebtedness not exceeding 60% of gross asset value;


•	fixed charge coverage ratio being not less than 1.70 to 1.00; and


•	tangible net worth being not less than $1.3 billion plus 80% of the sum of (i) net equity offering proceeds and (ii) the value of equity interests issued in connection with a contribution of assets to the Operating Partnership or its subsidiaries.

The facility includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Operating Partnership under the facility to be immediately due and payable. The Company was in compliance with all covenants under the facility as of June 30, 2013.

Indebtedness Retired During 2013

ACC5 Term Loan

On December 2, 2009, the Company entered into a $150 million term loan facility (the “ACC5 Term Loan”). In March 2013, the Company paid off the $138.3 million remaining balance of the ACC5 Term Loan which resulted in a write-off of unamortized deferred financing costs of $1.7 million in the first quarter of 2013. The ACC5 Term Loan was scheduled to mature on December 2, 2014 and bore interest at LIBOR plus 3.00%.

A summary of the Company’s debt maturity schedule as of June 30, 2013 is as follows:

Debt Maturity as of June 30, 2013

($ in thousands)



Year	Fixed Rate			Floating Rate			Total		% of Total		Rates
2013	$	—		$	—		$	—	—	%	—	%
2014	—			—			—		—	%	—	%
2015	125,000		(1)	—			125,000		17.2	%	8.5	%
2016	125,000		(1)	63,750		(2)(3)	188,750		26.0	%	6.3	%
2017	300,000		(1)	8,750		(3)	308,750		42.7	%	8.3	%
2018	—			102,500		(3)	102,500		14.1	%	2.0	%
Total	$	550,000		$	175,000		$	725,000	100	%	6.9	%


(1)	The Unsecured Notes have mandatory amortization payments due December 15 of each respective year.


(2)	The Unsecured Credit Facility matures on March 21, 2016 with a one-year extension option.


(3)	The ACC3 Term Loan matures on March 27, 2018 with no extension option. Quarterly principal payments of $1.25 million begin on April 1, 2016, increase to $2.5 million on April 1, 2017 and continue through maturity.