8-KMaterial AgreementsFinancial Events

EQUINIX INC 8-K Report, Material Agreement (Oct 1, 2015)

Filed October 1, 2015For Securities:EQIX

Summary

Equinix Inc. (EQIX) has filed an 8-K report detailing a material definitive agreement: a senior bridge term loan facility. This facility, amounting to up to JPY 47.5 billion (approximately USD $395.8 million as of September 30, 2015), is provided by The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU). The primary purpose of this bridge loan is to finance the cash consideration for the acquisition of Bit-isle Inc. ('Bit-isle'), a transaction previously announced by Equinix. Funds will also be used to repay existing Bit-isle debt, cover costs associated with acquiring remaining Bit-isle shares not tendered, and pay associated transaction expenses.

Key Highlights

  • 1Equinix secured a JPY 47.5 billion (approx. $395.8 million USD) senior bridge term loan facility from BTMU.
  • 2The loan is specifically to fund the acquisition of Bit-isle Inc.
  • 3The facility will also cover repayment of Bit-isle's existing debt and transaction costs.
  • 4The bridge loan has a maturity of one year from the first tranche's borrowing.
  • 5Interest rates start at Tokyo Interbank Offered Rate (TIBOR) + 0.4% for the first ten months, increasing to TIBOR + 1.75% thereafter.
  • 6Equinix anticipates refinancing the bridge loan with long-term debt before the ten-month mark.
  • 7Equinix and its subsidiaries are required to guarantee the obligations under the loan agreement.

Frequently Asked Questions

The primary purpose of this JPY 47.5 billion bridge loan facility is to finance the cash consideration required for Equinix's acquisition of Bit-isle Inc. It will also be used to repay Bit-isle's existing debt and cover related transaction expenses.

The bridge loan facility is for up to JPY 47.5 billion, which was approximately USD $395.8 million at the time of the filing. The lender is The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU).

The bridge loan matures one year after the first tranche is borrowed. The interest rate is initially set at TIBOR + 0.4% per annum for the first ten months, and then increases to TIBOR + 1.75% per annum. Equinix plans to refinance this with long-term debt within the ten-month period.

Yes, Equinix and certain of its direct and indirect subsidiaries are required to guarantee the borrowers' obligations under the Bridge Loan Agreement. The agreement also contains customary covenants and events of default.