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Press Release -- September 10th, 2013
Source: Dupont Fabros Technology

DuPont Fabros Technology, Inc. Announces Launch of Cash Tender Offer for $550 Million Aggregate Principal Amount of Outstanding Notes

WASHINGTON, Sept. 10, 2013 /PRNewswire/ — DuPont Fabros Technology, Inc. (DFT) (the “Company”), announced today that DuPont Fabros Technology, L.P. (the “Operating Partnership”) has launched a tender offer (the “Tender Offer”) and consent solicitation (the “Consent Solicitation”) for holders of its outstanding 8.5% Senior Notes due 2017 (the “Notes”). Pursuant to the Tender Offer, the Company is offering to purchase all of the Notes for cash and is also soliciting consents to amend certain terms of the indenture governing the Notes (the “Amendments”). The aggregate outstanding principal amount of the Notes as of September 9, 2013 was $550.0 million.

The terms and conditions of the Tender Offer and the Consent Solicitation are described in the Offer to Purchase and Consent Solicitation Statement, dated September 10, 2013 (as it may be amended or supplemented from time to time, the “Statement”) and the related Consent and Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal”), to be distributed to holders of the Notes.

The Operating Partnership expects to fund the Tender Offer and Consent Solicitation using proceeds from a concurrent public offering of a new series of senior unsecured notes (the “Notes Offering”) and, if necessary, available cash. Completion of the Tender Offer will be conditioned on (i) the closing of the Notes Offering and the receipt therefrom of proceeds, together with available cash, if required, sufficient to fund the Tender Offer and the Consent Solicitation and any related fees and expenses, (ii) the receipt of the consent of holders of more than 50% of the aggregate principal amount outstanding of the Notes (the “Requisite Consents”), (iii) the execution of a supplemental indenture, adopting the Amendments, to the indenture governing the Notes and (iv) certain customary tender offer conditions. The Operating Partnership may waive any of the conditions at its option.

The Notes subject to the Tender Offer and Consent Solicitation and certain additional information regarding the Tender Offer and Consent Solicitation are listed in the table below.

CUSIP No. Principal Amount Outstanding Security Description Tender Offer Consideration
Consent Payment (2) Total Consideration (1)(2)
26613TAC4 $550,000,000 8 ½% Senior Notes due
$1,030.04 $30 $1,060.04
(1) Per $1,000 principal amount of Notes, plus accrued and unpaid interest
(2) Per $1,000 principal amount of Notes, payable only to Holders who tender at or prior to the Early Tender Deadline (as hereinafter defined)

The Tender Offer will expire at 11:59 p.m., New York City time, on October 7, 2013, unless extended or earlier terminated by the Operating Partnership (such date and time, as the same may be modified, the “Expiration Date”).

Holders must validly tender their Notes and deliver their consents (“Consents”), and not validly withdraw tendered Notes or revoke the related Consents, at or prior to 5:00 p.m., New York City time, on September 23, 2013, unless extended by the Operating Partnership (such date and time, as the same may be modified, the “Early Tender Deadline”), in order to be eligible to receive the applicable total consideration of $1,060.04 (the “Total Consideration”), which includes the applicable consent payment of $30 (the “Consent Payment”), for each $1,000 principal amount of Notes.  Holders who validly tender Notes and deliver Consents after the Early Tender Deadline and on or prior to the Expiration Date will be eligible to receive only $1,030.04 (the “Tender Offer Consideration”) for each $1,000 principal amount of Notes, which is the Total Consideration minus the Consent Payment. In each case, holders whose Notes are accepted for payment in the Tender Offer will also receive accrued and unpaid interest in respect of such purchased Notes from the last interest payment date to, but not including, the applicable settlement date.

Holders may not tender their Notes in the Tender Offer without delivering their Consent to the proposed Amendments, and holders may not deliver their Consent to the proposed Amendments without tendering their Notes pursuant to the Tender Offer. If the Requisite Consents are obtained and the proposed Amendments are adopted by execution of the supplemental indenture, substantially all of the restrictive covenants, certain events of default and other provisions contained in the indenture governing the Notes (other than, among other covenants, the covenants to pay interest and premium, if any, on, and principal of, the Notes when due) would be eliminated or modified.

Tenders of Notes may be withdrawn and the related Consents may be revoked at any time before 5:00 p.m., New York City time on September 23, 2013 (unless extended, the “Withdrawal Time”) but not thereafter, except as required by law. Holders may not withdraw Notes previously tendered without revoking the previously delivered Consents to which such tender relates and vice versa.

Settlement for all Notes tendered on or prior to the Early Tender Deadline and accepted for payment is expected to occur on September 24, 2013, the first business day following the Early Tender Deadline on which all conditions to the tender offer have been satisfied or waived. Settlement for all Notes tendered after the Early Tender Deadline, but on or prior to the Expiration Date, is expected to occur promptly following the Expiration Date.

The Operating Partnership intends to call any Notes not tendered and purchased in the Tender Offer for redemption. The redemption may result in the holders of the redeemed Notes receiving compensation that is higher or lower than the Total Consideration or the Tender Offer Consideration.

The Operating Partnership has retained Goldman, Sachs & Co. to act as the dealer managers for the Tender Offer and Consent Solicitation and has retained Global Bondholder Services Corporation to act as the information agent and depositary for the Tender Offer and Consent Solicitation. Questions regarding the Tender Offer and Consent Solicitation should be directed to Goldman, Sachs & Co. by phone at (800) 828-3182 (toll-free) or at (212) 357-6436 (collect). Requests for documents relating to the Tender Offer and Consent Solicitation should be directed to Global Bondholder Services Corporation by telephone at (866) 470-4200 (toll-free).

This press release does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the Notes. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Notes or any other securities. The Operating Partnership is making the Tender Offer and Consent Solicitation only by, and pursuant to the terms of, the Statement and the related Letter of Transmittal. The Tender Offer and Consent Solicitation is not being made in any state or other jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such state or other jurisdiction. None of the Operating Partnership, the Company, the dealer manager, the information agent or depositary makes any recommendation in connection with the Tender Offer and Consent Solicitation.

About DuPont Fabros Technology, Inc.

DuPont Fabros Technology, Inc. (DFT) is a leading owner, developer, operator and manager of enterprise-class, carrier-neutral, large multi-tenanted wholesale data centers.  The Company’s facilities are designed to offer highly specialized, efficient and safe computing environments in a low-cost operating model.  The Company’s customers outsource their mission critical applications and include national and international enterprises across numerous industries, such as technology, Internet content providers, media, communications, cloud-based, healthcare and financial services.  The Company’s ten data centers are located in four major U.S. markets, which total 2.5 million gross square feet and 218 megawatts of available critical load to power the servers and computing equipment of its customers.  DuPont Fabros Technology, Inc., a real estate investment trust (REIT) is headquartered in Washington, DC.

Forward-Looking Statements

The statements contained in this release include forward-looking statements within the meaning of the federal securities laws. The Company cautions investors that any forward-looking statements presented in this release are based on management’s beliefs and assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “result” and similar expressions, which do not relate solely to historical matters, are intended to identify forward-looking statements. Such statements (including statements related to the Tender Offer and the Consent Solicitation, including the timing, the Expiration Date, the Early Tender Deadline, and the possible completion of the Tender Offer and the Consent Solicitation) are subject to risks, uncertainties and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties and factors that are beyond the Company’s control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. The Company cautions you that while forward-looking statements reflect its good faith beliefs when the Company makes them, they are not guarantees of future performance and are impacted by actual events when they occur after the Company makes such statements. The Company expressly disclaims any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends. Some of the risks and uncertainties that may cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following: adverse general or local economic or real estate developments in the Company’s markets or the technology industry, including a continued and prolonged economic downturn, failure to successfully lease vacant space in or operate our data center facilities, including delays in executing new leases and failure to negotiate leases on terms that will enable us to achieve our expected returns, defaults on or non-renewal of leases by tenants, including by the Company’s four largest tenants that accounted for 61% of the Company’s annualized base rent as of June 30, 2013, failure to collect tenant obligations and note receivables, failure to obtain necessary financing, extend the maturity of or refinance the Company’s existing debt, or comply with the financial and other covenants of the agreements that govern the Company’s existing debt, decreased rental rates, increased vacancy rates or tenant bankruptcies, the risks commonly associated with construction and development of new facilities (including delays and/or cost increases associated with the completion of new developments), risks relating to obtaining required permits and compliance with permitting, zoning, land-use and environmental requirements, increased interest rates, the Company’s failure to qualify and maintain qualification as a REIT, adverse changes in tax laws, environmental uncertainties, risks related to natural disasters, financial market fluctuations, including disruptions in the financial and credit markets and the availability of capital and other financing, and changes in real estate and zoning laws.

The risks and uncertainties discussed in our filings are not exhaustive.  For a further discussion of these and other factors that could cause future results to differ materially from any forward-looking statements, see the risk factors incorporated by reference from the Annual Report of the Company and the Operating Partnership on Form 10-K for the year ended December 31, 2012 and in other documents that the Company and/or the Operating Partnership file from time to time with the Securities and Exchange Commission. The Company operates in a very competitive and rapidly changing environment and new risk factors may emerge from time to time. It is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

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