8-KMaterial AgreementsFinancial Events

EQUINIX INC 8-K Report, Material Agreement (Mar 16, 2010)

Filed March 16, 2010For Securities:EQIX

Summary

Equinix, Inc. (EQIX) announced a significant financing event through its Asia Pacific subsidiaries on March 10, 2010. The company entered into a $170 million multi-currency credit facility to refinance existing debt and support future capital expansion in the region. This facility provides financial flexibility with a five-year term, including an immediate draw tranche and a delayed draw option, along with competitive initial borrowing margins that can decrease based on leverage. This move demonstrates Equinix's proactive approach to managing its debt structure and funding growth initiatives in a key international market. The company is also separately negotiating the repayment of other secured debt, including a non-binding agreement for a $110 million loan, indicating ongoing efforts to optimize its overall balance sheet. Investors should note the focus on international growth and debt management as key drivers of value.

Key Highlights

  • 1Equinix entered into a $170 million multi-currency credit facility for its Asia Pacific subsidiaries.
  • 2The facility's purpose is to refinance existing secured loans and fund ongoing/future capital expansion in the Asia Pacific region.
  • 3The credit facility has a five-year term with two tranches: one for immediate drawing and another with a 24-month delayed draw option.
  • 4Initial borrowing margins are set at 3.50% over local rates, with a potential reduction to 2.50% based on leverage.
  • 5The facility is guaranteed by Equinix, Inc. and secured by certain assets and share pledges of the Borrowing Group.
  • 6Equinix is also in negotiations to repay a separate $110 million secured loan.
  • 7The financing provides Equinix with increased financial flexibility to support its growth strategy in key international markets.

Frequently Asked Questions

The primary purpose of the $170 million credit facility is to refinance existing secured loans within Equinix's Asia Pacific subsidiaries and to provide funding for ongoing and future capital expansion requirements in that region.

The credit facility has a five-year term. It includes an initial tranche available for immediate drawing to refinance existing debt, and a second tranche with a delayed draw option of up to 24 months. The borrowing margin starts at 3.50% over local borrowing rates and can decrease to 2.50% depending on the Borrowing Group's leverage ratio.

This facility enhances Equinix's financial flexibility by providing access to capital for strategic growth in the Asia Pacific region and by refinancing existing debt. The structure allows for timely access to funds while also offering competitive terms that can improve as the company's leverage decreases. The separate negotiation for the repayment of a $110 million loan also suggests a broader effort to manage and potentially reduce outstanding debt.

The joint mandated lead arrangers and bookrunners are DBS Bank Ltd., ING Bank, N.V., Singapore Branch, The Royal Bank of Scotland N.V., and GE Commercial Finance (Hong Kong) Ltd. The Royal Bank of Scotland N.V. will also serve as the Facility Agent.