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.