8-KMaterial Agreements

EQUINIX INC 8-K Report, Material Agreement (May 19, 2014)

Filed May 19, 2014For Securities:EQIX

Summary

Equinix, Inc. (EQIX) filed an 8-K report on May 19, 2014, detailing amendments to its capped call transactions related to its 4.75% Convertible Subordinated Notes. The amendments, entered into on May 13, 2014, with Deutsche Bank AG, JPMorgan Chase Bank, and Goldman, Sachs & Co., essentially keep the call options active instead of terminating them due to the exchange of the Notes. This change impacts how these derivative instruments will be managed going forward. The key takeaway for investors is that the capped call transactions, designed to hedge against the potential dilution from the convertible notes, have been modified. The Amended Call Options retain similar terms but are now European-style with an expiration tied to the notes' maturity. Notably, the counterparties have provisions to transfer or terminate their positions under certain stock ownership thresholds, and the cap price will be adjusted for corporate actions affecting Equinix's common stock. These adjustments aim to maintain the effectiveness of the hedging strategy.

Key Highlights

  • 1Equinix entered into amendment agreements for its capped call transactions on May 13, 2014.
  • 2The amendments were made with Deutsche Bank AG, JPMorgan Chase Bank, and Goldman, Sachs & Co.
  • 3The amendments pertain to capped call transactions related to Equinix's 4.75% Convertible Subordinated Notes.
  • 4Instead of terminating, the call options remain outstanding as 'Amended Call Options'.
  • 5The Amended Call Options are now European-style with an expiration date matching the notes' maturity.
  • 6Counterparties have rights to transfer or terminate options if their stock ownership exceeds certain thresholds.
  • 7The cap price of the options will be adjusted for dilutive or concentrative events affecting Equinix's common stock.

Frequently Asked Questions

The primary change is that the capped call options, which were set to terminate due to the exchange of the convertible notes, will now remain outstanding. These are referred to as 'Amended Call Options'.

The counterparties are Deutsche Bank AG, London Branch, JPMorgan Chase Bank, National Association, London Branch, and Goldman, Sachs & Co.

The Amended Call Options are now European-style with an expiration date corresponding to the maturity of the 4.75% Convertible Subordinated Notes. Additionally, counterparties have provisions to transfer or terminate their positions if their ownership of Equinix's common stock exceeds certain levels, and the cap price is subject to adjustment for corporate actions.

The amendments were made in lieu of the planned exchanges of the Notes, which would have constituted a termination event for the capped call transactions. The amendments aim to maintain the hedging effect of these derivative instruments while adapting to changes in the underlying notes and potential corporate actions.