8-KOther EventsExhibits & Filings

EQUINIX INC 8-K Report, Corporate Update (Sep 24, 2020)

Filed September 24, 2020For Securities:EQIX

Summary

Equinix, Inc. (EQIX) has filed an 8-K report detailing a significant debt offering and planned debt redemption. On September 23, 2020, the company entered into an underwriting agreement to issue $1.85 billion in senior unsecured notes across three tranches: $700 million in 1.000% Senior Notes due 2025, $650 million in 1.550% Senior Notes due 2028 (labeled as Green Notes), and $500 million in 2.950% Senior Notes due 2051. The net proceeds are primarily earmarked for redeeming existing Euro-denominated senior notes, specifically €1 billion of 2.875% Senior Notes due 2025 and €500 million of 2.875% Senior Notes due 2026, expected to occur on October 23, 2020. This financial maneuver is a strategic move to refinance existing debt, likely taking advantage of favorable interest rates in the U.S. dollar market compared to the existing Euro notes, while also signaling a commitment to sustainability with the issuance of "Green Notes." The Green Notes proceeds are designated for environmentally friendly projects, aligning with ESG principles. Investors should note the forward-looking nature of these statements and the conditions precedent, such as the successful closing of the offering, which is anticipated by October 7, 2020. The company intends to use any remaining proceeds from the 2051 Notes for general corporate purposes.

Key Highlights

  • 1Equinix issued $1.85 billion in senior unsecured notes to refinance existing debt.
  • 2The new notes are structured into three tranches: $700M (1.000% due 2025), $650M (1.550% due 2028 - Green Notes), and $500M (2.950% due 2051).
  • 3The primary use of proceeds is to redeem €1.5 billion in outstanding Euro-denominated senior notes (2.875% due 2025 and 2.875% due 2026).
  • 4A portion of the offering includes $650 million in 'Green Notes' with proceeds allocated to sustainable projects, reflecting ESG commitments.
  • 5The redemption of the existing Euro notes is scheduled for October 23, 2020, and is conditional upon the successful closing of the new note offering.
  • 6The offering is expected to close on October 7, 2020, subject to customary closing conditions.
  • 7Net proceeds are estimated to be approximately $1.8 billion after deducting underwriting discounts and expenses.

Frequently Asked Questions

Equinix is issuing a total of $1.85 billion in senior unsecured notes. The tranches include $700 million of 1.000% Senior Notes due 2025, $650 million of 1.550% Senior Notes due 2028 (designated as Green Notes), and $500 million of 2.950% Senior Notes due 2051. The offering is expected to close on October 7, 2020.

The majority of the net proceeds, approximately $1.8 billion after expenses, will be used to redeem all outstanding €1 billion of 2.875% Senior Notes due 2025 and €500 million of 2.875% Senior Notes due 2026. Any remaining proceeds from the 2051 Notes will be used for general corporate purposes.

The $650 million in 1.550% Senior Notes due 2028 are referred to as 'Green Notes.' The company expects to allocate an amount equal to their net proceeds to finance or refinance projects related to green buildings, renewable energy, energy efficiency, sustainable water management, waste management, and clean transportation. Importantly, the indenture does not legally obligate the company to use the proceeds in this manner; failure to do so will not constitute a default.

Equinix has conditionally announced its intent to redeem all of its outstanding €1 billion of 2.875% Senior Notes due 2025 and €500 million of 2.875% Senior Notes due 2026. This redemption is expected to take place on October 23, 2020, at a redemption price above par plus accrued interest, and is contingent on the successful closing of the new $1.85 billion debt offering.