Summary
Equinix, Inc. (EQIX) filed an 8-K on December 27, 2016, reporting on an amendment to its Credit Agreement dated December 22, 2016. This amendment is significant as it allows Equinix to borrow up to €1.0 billion in additional Term B-2 Loans. The company expects to draw the full amount on or around January 6, 2017, with the proceeds earmarked to finance a portion of the acquisition of Verizon Communications Inc.'s colocation business, which was previously announced. In addition to adding new debt capacity, the amendment also favorably adjusts the terms of existing debt. Specifically, the interest rate margin for US Dollar loans under the Term Loan B-1 Facility was reduced, and the LIBOR floor was lowered from 0.75% to zero. Similar favorable adjustments were made to the interest rate margin for Pound Sterling loans under the Term Loan B-1 Facility. These changes suggest a proactive approach by Equinix to optimize its capital structure and manage borrowing costs.
Key Highlights
- 1Equinix amended its Credit Agreement on December 22, 2016.
- 2The amendment allows for the borrowing of up to €1.0 billion in additional Term B-2 Loans.
- 3The proceeds from the new Term B-2 Loans are intended to fund part of the acquisition of Verizon's colocation business.
- 4The company anticipates borrowing the full €1.0 billion on or about January 6, 2017.
- 5Interest rate margins on US Dollar Term Loan B-1 loans were reduced from 3.25% to 2.50%.
- 6The LIBOR floor for US Dollar Term Loan B-1 loans was reduced from 0.75% to zero.
- 7Interest rate margins on Pound Sterling Term Loan B-1 loans were reduced from 3.75% to 3.00%.