Adam Smith Awards 2018 Client Casebook

OVERALL WINNER Treasury Today’s Top Treasury Team software and prevent payment fraud. The programme is reviewed and revisited annually to ensure all finance team members are fully informed of the latest threats. North America: exposure controls The company inherited multiple banking partners, systems and processes following the acquisition of Telx in 2015 and the strategic merger with DuPont Fabros. Working with multiple banks reduced its visibility and control. Legacy acquisition accounts were integrated with Digital Realty’s US banking partner (Bank of America Merrill Lynch), enabling the closure of legacy acquisition accounts, making significant savings. A link was also built between the new accounts and Digital Realty’s Kyriba TMS, facilitating automation efficiency improvements. Digital Realty has US$3.55bn of floating rate multi-currency credit facilities, US$1.55bn of which is term loan, exposing it to interest rate risk. In addition, the company planned to issue debt as part of the financing plan for the strategic merger with DuPont Fabros Technology, further exposing the company to interest rate risk. Clearly the company needed to mitigate these risks and also sought to save on interest expense related to its planned extinguishment of DuPont Fabros Technology’s debt. To mitigate floating rate exposures, it executed US$261m of interest rate swaps and US$600m of debt pre-issuance hedges to hedge rate risk; the pre-issuance hedges were slightly in-the-money and terminated when longer-term debt was issued. A tender offer for DuPont Fabros Technology’s outstanding notes was successful; US$0.9m was saved compared with the standard call redemption notice. To take advantage of favourable market conditions, Digital Realty issued US$1.8bn debt in advance of a planned acquisition. The team needed to safely manage these proceeds until the acquisition closed. Funds were deposited in multiple cash investment vehicles to mitigate “The Top Treasury Team accolade is always hotly contested with some high profile corporations winning in previous years. Our judges felt that Digital Realty Trust have really pushed the boundaries with their submission which is all about multiple challenges being addressed by multiple projects delivering fantastic results : it’s all possible if the team pulls together . That team, under the direction of Michael Brown, VP Treasury, is a most worthy winner in 2018. Congratulations from the team at Treasury Today.” – Richard Parkinson, Chairperson, Treasury Today Declan Murtagh and Michael Brown, Digital Realty Trust 6 | treasurytoday Adam Smith Awards © August 2018