8-KSecurities & Listing

EQUINIX INC 8-K Report, Unregistered Securities Sale (Apr 24, 2014)

Filed April 24, 2014For Securities:EQIX

Summary

Equinix, Inc. (EQIX) filed an 8-K on April 24, 2014, to report on a significant debt-for-equity exchange. The company entered into an agreement to retire approximately $98.9 million of its outstanding 4.75% Convertible Subordinated Notes. In exchange for these notes, Equinix will issue approximately 1,172,766 shares of its common stock and $10.3 million in cash to the noteholder. This transaction is structured to provide a net present value benefit to Equinix, indicating a favorable financial outcome for the company. The exchange is scheduled to close on May 2, 2014, subject to standard closing conditions. The issuance of common stock is being conducted under the exemption provided by Section 3(a)(9) of the Securities Act of 1933, meaning it is not being registered with the SEC.

Key Highlights

  • 1Equinix is exchanging approximately $98.9 million of its 4.75% Convertible Subordinated Notes.
  • 2The company will issue approximately 1,172,766 shares of common stock as part of the exchange.
  • 3Equinix will also pay approximately $10.3 million in cash to the noteholder.
  • 4The transaction is expected to result in a net present value benefit for Equinix.
  • 5The note exchange is scheduled to be completed on May 2, 2014.
  • 6The issuance of common stock is being made under the Section 3(a)(9) exemption from registration.
  • 7Keith D. Taylor, Chief Financial Officer, signed the filing.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Equinix's entry into a note exchange agreement, where it will retire a significant portion of its convertible subordinated debt by issuing common stock and cash to a noteholder.

The exchange is expected to provide a net present value benefit to Equinix, suggesting that the company believes this transaction is financially advantageous. It effectively reduces the company's debt obligations.

The exchange involves approximately $98.9 million in principal value of notes being exchanged for a combination of Equinix common stock and $10.3 million in cash. The exact valuation and terms would be detailed in the Exchange Agreement itself, but the filing indicates a total cash component of $10.3 million paid by Equinix.

The issuance of common stock is being made in reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act of 1933. This exemption typically applies to exchanges of securities where no commission or other remuneration is paid or given to any person for soliciting the exchange, other than a broker or dealer in securities.