DuPont Lowers Guidance, Citing Debt Costs
December 14th, 2009 By: Rich Miller
DuPont Fabros Technology (DFT) said late Friday that it has lowered its guidance for the fourth quarter and full year 2009, citing costs related to a restructuring ot the company’s debt. DuPont Fabros said it expects to pay $14 million to retire an interest rate swap as part of a broader plan to retire existing debt and replace it with new borrowing.
DuPont Fabros, a real estate investment trust (REIT) specializing in data center properties, Funds from operations (“FFO”) for the fourth quarter of 2009 will be between 0 to 3 cents per fully diluted share, compared to a previous range of 26 to 29 cents. The company had been expecting FFO for the full year 2009 of $1.09 to $1.12 per share, but has now reduced that range to 83 cents to 86 cents.
Shares of DuPont Fabros are down 23 cents to $16.87 in afternoon trading on the Newe York Stock Exchange, a decline of 1.3 percent for the session.
DuPont Fabros also revised its full year 2009 dividend guidance and now anticipates paying a dividend of 8 cents per share for 2009, compared to previous guidance of 24 to 30 cents per share. The company now anticipates paying a 2010 quarterly dividend of 8 cents per share.
The revised guidance takes into account the anticipated closing of a $550 million offering of unsecured senior notes and the completion and use of a $150 million term loan secured by its new ACC5 data center, which was announced by the company on Dec. 3.
A portion of the proceeds from the ACC5 term loan and the sale of senior notes will be used to repay secured debt. As part of the repayment, DuPont Fabros intends to terminate a related interest swap agreement, “which is expected to result in an estimated $14 million payment by DuPont Fabros to the swap counterparty and an associated charge against net income,” the company said.