What is the purpose of this new Credit Agreement?

The Credit Agreement provides Equinix with $750 million in senior unsecured 364-day term loan facilities. The company intends to use the proceeds for working capital, capital expenditures, acquisitions, and other general corporate purposes, thereby enhancing its overall liquidity and financial flexibility.

How much has Equinix borrowed so far under this facility?

On April 15, 2020, Equinix borrowed $391 million and €100 million under the $500 million Closing Date Facility. The remaining $250 million Delayed Draw Facility is available for borrowing in up to three tranches before July 14, 2020.

What are the interest rates and maturity date for these loans?

Borrowings denominated in U.S. dollars will accrue interest at either LIBOR plus a 1.75% margin or the Base Rate plus a 0.75% margin. Euro borrowings will bear interest at LIBOR plus a 1.50% margin. All borrowings must be repaid in full by April 14, 2021.

Are there any financial restrictions Equinix must adhere to?

Yes, the Credit Agreement contains customary covenants. Key financial covenants require Equinix to maintain a consolidated Net Lease-Adjusted Leverage Ratio of less than or equal to 6.00 to 1.00, a consolidated Fixed Charge Coverage Ratio greater than or equal to 1.50 to 1.00, and a consolidated Lease-Adjusted Secured Leverage Ratio of less than or equal to 2.25 to 1.00, as of the end of each fiscal quarter.

EQIX 8-K: Material Agreements & Financial Events

Summary

Equinix, Inc. (EQIX) announced on April 15, 2020, the entry into a new Credit Agreement establishing senior unsecured 364-day term loan facilities totaling $750 million. This agreement enhances the company's liquidity and financial flexibility, providing capital for working capital, capital expenditures, acquisitions, and general corporate purposes. The company has already drawn $391 million and €100 million from the initial $500 million facility, indicating immediate utilization of these funds.

Key Highlights

1Equinix secured a $750 million senior unsecured 364-day term loan facility.
2The facility consists of a $500 million Closing Date Facility and a $250 million Delayed Draw Facility.
3Proceeds are designated for working capital, capital expenditures, acquisitions, and general corporate purposes.
4On the closing date, $391 million and €100 million were borrowed under the Closing Date Facility.
5The loan matures on April 14, 2021, with interest rates tied to LIBOR or a Base Rate plus specified margins.
6The agreement includes customary covenants, such as maintaining specific leverage and coverage ratios (e.g., Net Lease-Adjusted Leverage Ratio <= 6.00:1.00).
7This action strengthens Equinix's financial flexibility and short-term liquidity.

EQUINIX INC 8-K Report, Material Agreement (Apr 15, 2020)

Summary

Key Highlights

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