Giant data center REIT Digital Realty (NYSE:DLR) has announced a new preferred stock issue.
Being a REIT this issue will be cumulative, non qualified and redeemable starting in 2024.
The company has numerous preferred issues outstanding and while the company has not announced a definite redemption there is certainly a possibility that this will occur with the DLR-G 5.875% issue which is the only issue currently redeemable.
Their outstanding issues can be seen here.
The preliminary prospectus can be read here.
Thanks to mcg who was right on this one in the Reader Initiated Alerts page.
And here is the term sheet filed with the SEC.
https://www.sec.gov/Archives/edgar/data/1297996/000119312519259958/d814273dfwp.htm
I agree with SteveA. Not surprised with the rate and not excited about the rate either.
Expected ratings (Moodys, S&P, Fitch) Baa3/BB+/BB+. Would not be surprised to see a rating downgrade in the next recession along with other preferreds presently rated IG.
Here is the press release.
https://investor.digitalrealty.com/news-and-events/news/press-release-details/2019/Digital-Realty-Announces-Pricing-Of-Preferred-Stock-Offering-d283c9a61/default.aspx
Not surprised by 5.2%. Not interested either unless it opens below under Par. I will share than I ran data centers my whole career. Moving data centers is a huge task, so their existing business so be very very sticky.
SteveA–thanks. I actually like the company from a business perspective–BUT any perpetual at this coupon holds little interest for me at this time. Of course if rates continue downward I reserve the right to change my tune.
It printed at 5.20%
I’m curious where you got the 5.2 % so early as it wasn’t on sec.gov or DLR website. Thanks for sharing.
If you Prefer–you win the prize on this one. Thanks
DLRTP otc symbol
Thanks mcg
Very interested to see this coupon. If they are going to call DLR-G, you would think about 5.4%-5.5% as the maximum coupon.
But based upon their last issue this is a mixed IG issue (IG by Moody’s, Just below by SP). That would suggest to me closer to 5.5% – 5.7% which would not really save much at all by calling DLR-G.
Are they going to try a real low coupon of 5.2% – 5.4% ?
SteveA–only God knows for sure. Minimally it should keep the issue around $25 with the call fear making it a possible dividend capture play in the future.