Digital Realty Trust (DLR) announced that its indirect‑finance subsidiary, Digital Euro Finco, LLC, will redeem all outstanding 2.500% Guaranteed Notes due 2026 on December 18, 2025. The redemption will be executed at par value plus accrued and unpaid interest, eliminating €1.075 billion of principal from the company’s balance sheet.
The redemption price includes accrued interest of €23.01 per €1,000 of principal, which translates to roughly €24.8 million in accrued interest paid on the transaction. By removing this debt, DLR is expected to reduce its annual interest expense by an estimated €70 million, based on the notes’ coupon rate and the remaining maturity profile.
Prior to the redemption, DLR’s debt‑to‑EBITDA ratio stood at 7.11 as of September 2025, and its net debt‑to‑adjusted EBITDA was 5.1× in Q1 2025. The €1.075 billion reduction is projected to lower the debt‑to‑EBITDA ratio to approximately 6.5×, tightening leverage and improving the company’s credit profile.
Management has positioned the redemption as part of a broader deleveraging strategy aimed at freeing capital for high‑growth initiatives, particularly in AI‑driven data‑center capacity. CEO Andy Power noted that “redeeming these notes allows us to strengthen our balance sheet and maintain flexibility to invest in the next wave of AI infrastructure, while also providing a cushion against rising interest rates.”
Digital Realty’s focus on AI and cloud‑edge services has accelerated demand for its colocation and interconnection offerings. The company’s recent joint venture in India and partnership with NVIDIA underscore its commitment to expanding AI capacity. The debt reduction is expected to enhance DLR’s ability to fund these projects without compromising financial stability.
The move signals confidence in the company’s long‑term growth trajectory and reinforces its strategy of balancing disciplined capital management with aggressive investment in emerging technology markets.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.