SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 15, 2020
(Exact name of registrant as specified in its charter)
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Common Stock, par value $0.001 per share
The NASDAQ Stock Market LLC
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Item 1.01. Entry into a Material Definitive Agreement
On April 15, 2020 (the “Closing Date”), Equinix, Inc. (“Equinix”) entered into a Credit Agreement (the “Credit Agreement”), by and among Equinix, as borrower, a syndicate of financial institutions, as lenders, MUFG Bank, Ltd. (“MUFG”), as administrative agent, and MUFG Union Bank, N.A., Sumitomo Mitsui Banking Corporation, TD Securities (USA) LLC and Mizuho Bank, Ltd., as joint lead arrangers.
The Credit Agreement provides for senior unsecured 364-day term loan facilities (collectively, the “Facilities”) in an aggregate principal amount of $750,000,000, comprised of a $500,000,000 term loan facility (the “Closing Date Facility”) available to be borrowed on the Closing Date (and a portion of which is available to be borrowed in Euro) and a $250,000,000 term loan facility (the “Delayed Draw Facility”) available to be borrowed in up to three separate borrowings on or prior to July 14, 2020, subject to the satisfaction of customary conditions to borrowing.
The Facilities are common forms of short-term pro rata bank debt which enhance Equinix’s overall liquidity and increase its financial flexibility. Equinix intends to use the net proceeds from the Facilities for working capital, capital expenditures, acquisitions and other general corporate purposes. On the Closing Date, Equinix borrowed $391,000,000 and €100,000,000 in two separate borrowings under the Closing Date Facility.
Borrowings under the Facilities must be repaid in full on or prior to April 14, 2021. Borrowings denominated in U.S. dollars will bear interest at either (x) an index based on LIBOR plus a margin of 1.75% or, at the option of Equinix, (y) 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 0.50%, (b) the MUFG prime rate and (c) one-month LIBOR plus 1.00%) plus a margin of 0.75%. Borrowings denominated in Euro will bear interest at an index based on LIBOR plus a margin of 1.50%. A facility fee of 0.20% per annum shall be payable in respect of the total amount of unfunded commitments under the Delayed Draw Facility.
The Credit Agreement contains customary representations and warranties, events of default and affirmative and negative covenants that are substantially similar to the representations and warranties, events of default and affirmative and negative covenants contained in Equinix’s existing multicurrency credit facility, including financial covenants that require Equinix to maintain: (a) a consolidated net lease-adjusted leverage ratio of less than or equal to 6.00 to 1.00 as of the last day of each fiscal quarter, (b) a consolidated fixed charge coverage ratio greater than or equal to 1.50 to 1.00 as of the last day of each fiscal quarter and (c) a consolidated lease-adjusted secured leverage ratio of less than or equal to 2.25 to 1.00 as of the last day of each fiscal quarter.
The foregoing description of the Credit Agreement is qualified in its entirety by reference to the complete text of the Credit Agreement, which will be filed as an exhibit to Equinix’s Form 10-Q for the quarter ended June 30, 2020.
Item 2.03. 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 Credit Agreement disclosed in Item 1.01 above.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DATE: April 15, 2020
By:/s/ Keith D. Taylor
Keith D. Taylor
Chief Financial Officer