Item 1.01 Entry into a Material Definitive Agreement
On January 7, 2022 (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, Bank of America, N.A., as
administrative agent, Citibank, N.A., JPMorgan Chase Bank, N.A., MUFG Bank,
Ltd., RBC Capital Markets, Goldman Sachs Bank USA and HSBC Securities (USA)
Inc., as co-syndication agents, Barclays Bank PLC, BNP Paribas, Deutsche Bank AG
New York Branch, ING Bank N.V., Dublin Branch, Morgan Stanley Senior Funding,
Inc., Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia and TD
Securities (USA) LLC, as co-documentation agents, and BofA Securities, Inc.,
Citibank, N.A., JPMorgan Chase Bank, N.A., MUFG Bank, Ltd., RBC Capital Markets,
Goldman Sachs Bank USA and HSBC Securities (USA) Inc., as joint lead arrangers
and book runners, which Credit Agreement is comprised of (i) a $4,000,000,000
senior unsecured multi-currency revolving credit facility (the "Revolving
Facility") and (ii) a £500,000,000 senior unsecured term loan facility (the
"Term Loan Facility" and, together with the Revolving Facility, collectively,
the "Senior Credit Facilities").
The Senior Credit Facilities have a maturity date of January 7, 2027 (the
"Maturity Date"). Equinix may borrow, repay and reborrow amounts under the
Revolving Facility until the Maturity Date, at which time all amounts
outstanding under the Revolving Facility must be repaid in full. Equinix
borrowed the full £500,000,000 available under the Term Loan Facility on the
Closing Date. The Term Loan Facility has no scheduled principal amortization and
must be repaid in full on the Maturity Date.
A portion of the proceeds of the Term Loan Facility was used to refinance
indebtedness that was outstanding under Equinix's Credit Agreement dated as of
December 12, 2017 (as amended, the "2017 Credit Agreement"). The remaining
proceeds of the Term Loan Facility and the proceeds of the Revolving Facility
shall be available to 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 credit and bank
guarantees. The Revolving Facility provides for extensions 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 (each foreign currency, an "Alternative Currency").
Borrowings under the Senior Credit Facilities denominated in U.S. dollars will
bear interest at either (i) Term SOFR (defined as the forward-looking Secured
Overnight Financing Rate ("SOFR") term rate plus a SOFR adjustment), (ii) Daily
SOFR (defined as SOFR plus a SOFR adjustment) or (iii) 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 0.5%, (b) the Bank of America
prime rate and (c) Daily SOFR plus 1.00%), plus, in each case, a margin based on
either Equinix's consolidated net leverage ratio or Equinix's corporate credit
ratings from S&P Global Ratings, Fitch Ratings Inc. and Moody's Investors
Service, Inc. (such corporate credit ratings, the "Credit Ratings" and such
margin, the "Applicable Margin"). Borrowings under the Senior Credit Facility
denominated in an Alternative Currency will bear interest at a term reference
rate or overnight reference rate applicable to the relevant Alternative Currency
plus the adjustment (if any), plus the Applicable Margin.
As of the Closing Date, (i) under the Term Loan Facility, the Applicable Margin
for Base Rate borrowings was zero and the Applicable Margin for any other
borrowing was 87.5 basis points (0.875%) and (ii) under the Revolving Facility,
the Applicable Margin for Base Rate borrowings was zero and the Applicable
Margin for any other borrowing was 77.5 basis points (0.775%). 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
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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 Facilities.
The Credit Agreement contains customary covenants, including a financial
covenant which requires Equinix to maintain, as of the end of each fiscal
quarter, up to a maximum ratio of consolidated net funded debt to consolidated
adjusted EBITDA, as well as customary events of default.
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 Equinix's Form 10-K for the year ended December
31, 2021.
Item 1.02 Termination of a Material Definitive Agreement
On January 7, 2022, Equinix prepaid in full all of the indebtedness outstanding
under the 2017 Credit Agreement using a portion of the proceeds of the Term Loan
Borrowing and terminated the 2017 Credit Agreement.
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.
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