EQUINIX, INC. (NASDAQ:EQIX) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On December12, 2017, Equinix, as borrower, certain domestic subsidiaries of Equinix, as guarantors, a syndicate of financial institutions, as lenders (each a “Lender” and together, the “Lenders”), Bank of America, N.A., as administrative agent, a Lender and L/C issuer, Barclays Bank PLC, Goldman Sachs Bank USA, HSBC Securities (USA) Inc., ING Capital LLC, TD Securities (USA) LLC and Wells Fargo Bank, National Association as co-documentation agents and Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A., MUFG and RBC Capital Markets, as joint lead arrangers and book runners entered into a Credit Agreement (the “Credit Agreement”) in the aggregate principal amount of approximately 3.0 billion (US dollar equivalent), comprised of (i)a 2.0billion (US dollar equivalent) senior unsecured multi-currency revolving credit facility (the “Revolving Facility”) and (ii)an approximately 1.0 billion (US dollar equivalent) senior unsecured multi-currency term loan facility (the “Term Loan Facility” and, together with the Revolving Facility, collectively, the “Senior Credit Facility”). The Senior Credit Facility has a maturity date of December12, 2022. Equinix may borrow, repay and reborrow amounts under the Revolving Facility until the maturity date of the Senior Credit Facility, at which time all amounts outstanding under the Revolving Facility must be repaid in full. Equinix borrowed £500,000,000 (or the US dollar equivalent of approximately 668.7million at prevailing exchange rates in effect on December6, 2017) and SEK 2,800,000,000 (or the US dollar equivalent of approximately 331.9million at prevailing exchange rates in effect on December6, 2017) under the Term Loan Facility on December12, 2017 (each such borrowing, a “Term Loan Borrowing”). Commencing with the last business day of June 2018, each Term Loan Borrowing must be repaid in equal quarterly installments in the amount of 1.25% of such Term Loan Borrowing, with the remaining amount outstanding of each Term Loan Borrowing to be repaid in full on the maturity date of the Senior Credit Facility. Once repaid, amounts borrowed under the Term Loan Facility may not be reborrowed.
A portion of the proceeds of the Term Loan Facility was used to refinance indebtedness that was outstanding under the 2014 Credit Agreement, as described further below under Item 1.01, and to pay fees and expenses incurred in connection with the closing of the Senior Credit Facility. The remaining proceeds of the Term Loan Facility and the proceeds of the Revolving Facility shall be used for working capital, capital expenditures, acquisitions, dividends, distributions, stock buybacks, the issuance of letters of credit and other general corporate purposes. The Revolving Facility includes a $250,000,000 sublimit for the issuance of standby letters of
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credit. The Revolving Facility provides for borrowings and the issuances of letters of credit in United States Dollars as well as certain foreign currencies, including Euro, Sterling, Yen, Canadian Dollars, Australian Dollars, Hong Kong Dollars, Singapore Dollars, Swiss Francs, Swedish Krona and such other currencies as may from time to time be agreed to by the Lenders.
Borrowings under the Senior Credit Facility will bear interest at an index based on LIBOR or, at the option of Equinix, the Base Rate (defined as the highest of (a)the Federal Funds Rate (with such rate deemed to be zero if the Federal Funds Rate is less than zero) plus 1/2 of 1%, (b)the Bank of America prime rate and (c)one-month LIBOR plus 1.00%), plus, in either case, a margin based on either Equinix’s consolidated net lease adjusted leverage ratio or Equinix’s corporate credit rating from S&P Global Ratings, a division of S&P Global, Inc, (“S&P”), and corporate family rating from Moody’s Investors Service, Inc. (“Moody’s’). At the time of closing, (i)under the Term Loan Facility, the applicable margin for LIBOR-based borrowings was 145 basis points and the applicable margin for Base Rate borrowings was 45 basis points and (ii)under the Revolving Facility, the applicable margin for LIBOR-based borrowings was 120 basis points and the applicable margin for Base Rate borrowings was 20 basis points. A facility fee shall be payable quarterly in respect of the total amount of the Lenders’ commitments (regardless of utilization) under the Revolving Facility. Letter of credit fees shall be payable quarterly on the maximum amount available to be drawn under each letter of credit. Equinix is also required to pay certain fees to the administrative agent under the Senior Credit Facility.
The Senior Credit Facility contains customary covenants, including financial covenants which require Equinix to maintain certain financial coverage and leverage ratios, as well as customary events of default.
Equinix’s obligations under the Senior Credit Facility are guaranteed by certain of Equinix’s domestic subsidiaries. The guarantees shall be automatically released if Equinix receives certain minimum credit ratings from S&P and Moody’s and if certain other conditions set forth in the Credit Agreement are satisfied.
The foregoing description of the Credit Agreement is only a summary and is qualified in its entirety by reference to the Credit Agreement, a copy of which will be filed as an exhibit to our Annual Report on Form 10-K for the year ended December31, 2017.
Barclays Bank plc, Citigroup Global Markets Inc., Goldman Sachs& Co. LLC, HSBC Securities (USA) Inc., ING Bank N.V., London Branch, J.P. Morgan Securities plc, Merrill Lynch International, MUFG Securities EMEA plc, RBC Europe Limited, TD Securities (USA) LLC, U.S. Bancorp Investments, Inc., and Wells Fargo Securities International Limited and/or their respective affiliates have in the past provided investment banking services to Equinix. Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Goldman Sachs Bank USA, HSBC Bank USA, ING Capital LLC, JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., MUFG Union Bank, N.A., Royal Bank of Canada, Sumitomo Mitsui Banking Corporation, TD Securities (USA) LLC, and U.S. Bank National Association and/or their respective affiliates have in the past provided lending services to Equinix.
| Item 1.01 | Termination of a Material Definitive Agreement |
On December12, 2017, using the net proceeds of the sale of the Notes, a portion of the proceeds of the Term Loan Borrowings and approximately $10 million of cash on hand, Equinix prepaid in full all of the indebtedness outstanding under the 2014 Credit Agreement and terminated the 2014 Credit Agreement.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-balance Sheet Arrangement of a Registrant |
Please refer to the description of the Senior Credit Facility disclosed in Item 1.01 above.
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The information related to the Underwriting Agreement in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 1.01. A copy of the Underwriting Agreement is filed as Exhibit 1.1 hereto and is incorporated herein by reference.
| Item 1.01. | Financial Statements and Exhibits |
(d) Exhibits
|
Exhibit No. |
Description |
| 1.1* | Underwriting Agreement, dated December 5, 2017, between Equinix, Inc. and Merrill Lynch International, Citigroup Global Markets Inc., J.P. Morgan Securities plc, MUFG Securities EMEA plc and RBC Europe Limited, as representatives of the several underwriters named in Schedule II thereto |
| 4.1* | Indenture, dated as of December 12, 2017, between Equinix, Inc. and U.S. Bank National Association, as trustee |
| 4.2* | Supplemental Indenture, dated as of December 12, 2017, among Equinix, Inc. and U.S. Bank National Association, as trustee, and Elavon Financial Services DAC, UK Branch, as paying agent |
| 4.3* | Form of 2.875% Senior Notes due 2026 (included in Exhibit 4.2) |
| 5.1* | Opinion of Davis Polk & Wardwell LLP |
| 23.1* | Consent of Davis Polk & Wardwell LLP (included in Exhibit 5.1) |
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EQUINIX INC ExhibitEX-1.1 2 d489470dex11.htm EX-1.1 EX-1.1 Exhibit 1.1 Equinix,…To view the full exhibit click here