Summary
Equinix Inc. (EQIX) has announced a material definitive agreement through its Japanese subsidiary, Equinix Japan K.K. (EJKK), entering into a Term Loan Agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd. This agreement provides EJKK with a term loan facility of up to JPY 47.5 billion (approximately USD 468.6 million). The primary purpose of this new financing is to repay an existing bridge loan that was utilized for the acquisition of Bit-isle, Inc. in December 2015 and to clear associated debt. This refinancing demonstrates Equinix's ongoing efforts to optimize its capital structure and manage acquisition-related debt effectively. Investors should note that Equinix, Inc. and its subsidiaries are providing guarantees for this new loan facility.
Key Highlights
- 1Equinix Japan K.K. secured a JPY 47.5 billion (approx. USD 468.6 million) term loan.
- 2The loan proceeds will be used to repay an existing bridge loan related to the Bit-isle acquisition.
- 3The loan matures on October 29, 2021, with quarterly principal repayments of JPY 625.0 million (approx. USD 6.2 million).
- 4Interest rate is based on Tokyo Interbank Offered Rate (TIBOR) plus a margin, initially 1.50%, potentially decreasing to 1.25% with an investment grade rating.
- 5Equinix, Inc. and its subsidiaries are required to guarantee the obligations under the Term Loan Agreement.
- 6The agreement includes customary covenants and financial covenants for EJKK, such as maintaining specific financial ratios starting FY2017.