Summary
Equinix, Inc. (EQIX) announced on May 13, 2014, a significant transaction involving the exchange of its 4.75% Convertible Subordinated Notes for common stock and cash. The company entered into agreements with certain noteholders to retire approximately $33.23 million of these notes. In return, Equinix will issue approximately 394,045 shares of its common stock and pay around $3.34 million in cash.
Key Highlights
- 1Equinix is exchanging approximately $33.23 million of its 4.75% Convertible Subordinated Notes for common stock and cash.
- 2The company will issue roughly 394,045 shares of its common stock as part of the exchange.
- 3Equinix will also pay approximately $3.34 million in cash to the noteholders.
- 4The transaction is expected to provide a net present value benefit to Equinix.
- 5The exchanges are scheduled to close on May 13, 2014, subject to customary conditions.
- 6As a result of this and prior exchanges, Equinix anticipates recognizing a loss on debt extinguishment of approximately $45 million in Q2 2014.
Frequently Asked Questions
The primary purpose of this 8-K filing is to report Equinix's entry into agreements to exchange a portion of its outstanding 4.75% Convertible Subordinated Notes for shares of its common stock and cash. This is considered an unregistered sale of equity securities under Item 3.02.
The company expects a net present value benefit from these exchanges. However, it also anticipates recognizing a loss on debt extinguishment of approximately $45 million in the second quarter of 2014, considering this transaction and prior note exchanges.
The issuance of the common stock is being made in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended. This exemption typically applies to exchanges between an issuer and its existing security holders.
In this particular transaction announced on May 12, 2014, approximately $33.23 million of the 4.75% Convertible Subordinated Notes are being exchanged.