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Digital Realty (DLR) Amends Revolving Credit Facility, Stock Up

Digital Realty's (DLR) amendment, extension and upsizing of its existing revolving credit facility will strengthen its balance-sheet position and enhance the financial flexibility.

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This story originally appeared on Zacks

Shares of Digital Realty DLR have moved 1.9% up following the amendment, extension and expansion of its existing global revolving credit facility to $3 billion from $2.35 billion.

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With this, the global revolving credit facilities feature a sustainability-linked pricing component. Based on annual-performance targets, the pricing is subject to adjustment. This apart, the pricing was tightened by five basis points at the BBB / Baa2 senior unsecured debt rating.

With the extension of the date by three years, the revolving credit facility will mature in January 2027. It bears two six-month extension options. In addition, Digital Realty has the ability to upsize the facility by up to $1.5 billion.

Digital Realty also amended and extended its existing ¥33.3-billion (roughly $290 million) Japanese yen-denominated revolving credit facility. With the exercise of two six-month extension options, the revolving credit facility will also mature in January 2027.

DLR can also further expand this facility by up to ¥60 billion (roughly $525 million).

Such efforts will offer greater financial flexibility and strengthen DLR’s balance-sheet position. Digital Realty exited third-quarter 2021 with cash and cash equivalents of $116 million.

Per management, “We believe the successful refinancing underscores the institutional lender community's view of the strength of our balance sheet and underlying business, while providing us with greater financial flexibility as we continue to prudently fund the growth of our global platform."

Shares of currently Zacks Rank #3 (Hold) DLR have appreciated 10.1% in the past six months, outperforming the industry’s rally of 8.4%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Key Picks

Some better-ranked stocks from the REIT sector are Cedar Realty Trust CDR, OUTFRONT Media OUT and Apple Hospitality REIT APLE.

The Zacks Consensus Estimate for Cedar Realty Trust’s current-year fund from operations (FFO) per share has been raised 2.6% in the past month. CDR currently flaunts a Zacks Rank #1 (Strong Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here.

Over the last four quarters, Cedar Realty’s FFO surpassed the consensus estimate on two occasions and missed the mark on the remaining two, the average surprise being 6.40%. Shares of CDR have appreciated 58.4% in the past six months, outperforming the industry’s rally of 8.3%.

The Zacks Consensus Estimate for OUTFRONT Media’s 2021 FFO per share has been raised 13.8% over the past month. OUT carries a Zacks Rank 1, currently.

Over the last four quarters, OUTFRONT Media’s FFO surpassed the consensus estimate thrice and reported in-line results in the remaining quarter. It delivered an average surprise of 44.87%. Shares of OUT have appreciated 14.9% in the past six months, outperforming the industry’s rally of 8.4%.

The Zacks Consensus Estimate for Apple Hospitality REIT’s 2021 FFO per share has moved 4.9% north in the past month. APLE currently carries a Zacks Rank of #2 (Buy).

Over the last four quarters, Apple Hospitality’s FFO surpassed the consensus mark thrice and missed the same once, the negative surprise being 14.2%. Shares of APLE have appreciated 9.3% in the past three months, outperforming the industry’s rally of 2.7%.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.



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Digital Realty Trust, Inc. (DLR): Free Stock Analysis Report

 

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