For Expansion, Dupont Fabros Sells Some Stock

May 12th, 2010 by · Leave a Comment

Datacenter developer Dupont Fabros Technology (NYSE:DFT, news, filings) has announced that it will sell some 11M shares of stock plus the customary extra 15% that underwriters can sell to cover overallotments.  That will raise more than $250M+ for the company when all is said and done, and will be roughly 25% dilution for shareholders - representing a substantial move.  What will they do with the money?  Well, build more datacenters obviously.  The cash will fund the construction of a new facility in Ashburn, to be called ACC6, and to restart progress on its Silicon Valley project SC1.  That project was put on hold back when the credit markets collapsed in the fall of 2008 and still required funding for completion. 

Dupont Fabros also announced a new unsecured, revolving credit cacility to the tune of $85M.  This replaces a similar credit facility that came due at the end of 2009, and contains a variety of financial covenants.  The interest rate will be LIBOR+4.5% and there is an accordion feature allowing an extra $15M under some circumstances. 

Clearly they are getting ready for a major push forward, and there seems to be no question that the extra space in Ashburn and Santa Clara will sell.  As Data Center Knowledge notes, the company has seen a surge in leasing activity in Chicago and Virginia and has just one pod left to sell in its ACC5 facility.  So it's definitely time to break ground on a few more.

Categories: Datacenter · Financials

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