Recently, Digital Realty raised $500 million from the issuance of a green bond. This is a notable achievement on several fronts: it is the first green bond deal of 2015 by a U.S. real estate investment trust (REIT) and it is only the sixth green bond ever issued in the REIT industry globally. Here’s a blog post on this bond offering by Chris Pyke of the Global Real Estate Sustainability Benchmark (GRESB), which states in part:
“A new, $500 million green bond issued by Digital Realty Trust, Inc. marks an important step forward for property-based bonds. Digital’s new bond is distinguished by several important aspects of its specifications for “Eligible Green Projects,” including support for multiple outcomes, provisions for lifecycle thinking, and global scope.”
For those not involved day to day in the exciting world of corporate finance, here’s a brief FAQ on bonds:
What is a corporate bond?
A corporate bond is a form of debt issued by a company to fund general operating needs, new projects, acquisitions, etc. As the only data center REIT with an investment grade credit rating, Digital Realty is able to issue bonds that can attract a wide range of institutional buyers.
What makes this a “green” bond?
Bond legal documents have a “use of proceeds” section that defines how the company plans to use the bond funds. For a green bond, this section specifies that the funds will be used for sustainable projects, including green building certifications, energy and water conservation, clean energy purchases, and renewable energy projects.
Data centers represent a natural opportunity for sustainability improvements, since they typically use large amounts of electricity. We’re excited to leverage our global footprint to deliver our customers more sustainable data center solutions across 30 markets on four continents.
Andy Power, Chief Financial Officer