QTS Realty launches cumulative redeemable perpetual preferreds

By Abigail W. Adams

Portland, Me., March 7 – QTS Realty Trust Inc. launched an offering of $25-par perpetual series A cumulative redeemable preferred stock, according to a 424B5 filing with the Securities and Exchange Commission.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC are joint bookrunners for the offering.

Dividends will be paid quarterly. The preferred stock is not callable until a specified date in 2023 when it becomes freely callable at par plus accrued dividends.

The notes may also be redeemed at par plus accrued dividends within 120 days of a change of control event.

If the redemption right is not exercised upon a change of control, holders will be entitled to convert the series A preferred stock into shares of the company’s class A common stock on the change of control conversion date.

The number of shares the preferred stock may be converted into will be equal to the lesser of the sum of the liquidation preference divided by the common stock price, or the share cap.

The preferred stock will be listed for trade on the New York Stock Exchange under the ticker “QTSPrA.”

Proceeds will be used to purchase comparable preferred units from QTS’s operating partnership Quality Tech, LP.

The operating partnership will in turn use proceeds to repay a portion of the outstanding amount under the unsecured revolving credit facility and for general corporate purposes.

The credit facility had $131 million outstanding as of Dec. 31, 2017.

QTS Realty Trust is a Chicago-based is a real estate investment trust that invests in carrier-neutral data centers.

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