Summary
Equinix, Inc. (EQIX) filed an 8-K on March 6, 2008, to report the termination of its Second Amended and Restated Loan and Security Agreement with Silicon Valley Bank and General Electric Capital Corporation, effective February 29, 2008. This agreement, originally dated August 10, 2006, provided for borrowing availability of up to $75.0 million, which could be used for revolving borrowings and letters of credit. Importantly, Equinix had no outstanding borrowings under this agreement for at least the past 12 months, and the outstanding letters of credit totaling $12.5 million will be cash collateralized. The company incurred no termination penalties. Management stated that the termination will not affect Equinix's expansion plans, as the company did not anticipate drawing on this specific credit line. Equinix expects to secure a replacement line of credit during 2008. This filing indicates a proactive financial management approach by Equinix, as it unwinds a credit facility that was not being utilized without incurring penalties and plans to establish new financing arrangements.
Key Highlights
- 1Equinix terminated its $75.0 million Second Amended and Restated Loan and Security Agreement.
- 2The termination was effective February 29, 2008.
- 3No borrowings were outstanding under the agreement for at least the past 12 months.
- 4Outstanding letters of credit totaling $12.5 million will be cash collateralized.
- 5Equinix incurred no termination penalties.
- 6The termination is not expected to impact the company's expansion plans.
- 7Equinix plans to secure a replacement line of credit during 2008.