Merrill Lynch Arranges Equinix Credit Facility Amendment
Equinix announced it amended its senior secured credit facility comprised of a $550 million multi-currency revolving credit facility and a $200 million term loan facility. Merrill Lynch, Pierce, Fenner & Smith is lead arranger, with Bank of America as administrative agent for the credit facility.
The amendments are an important step in preparing the company for its proposed conversion to a Real Estate Investment Trust (REIT) in January 2015.
Equinix amended the credit facility to allow the company greater flexibility to make pre-REIT conversion purge distributions and post-REIT conversion cash dividends necessary to comply with REIT rules and regulations if the company is successful in its REIT conversion. The company also amended certain financial covenants to provide greater operational flexibility.
In addition, an accordion feature has been included to allow Equinix to request an increase in the aggregate amount available to be borrowed under the revolving credit facility by an additional $250 million for a total of $800 million in revolving credit availability, subject to certain conditions and the receipt of lender commitments. Equinix’s cost of borrowing under the credit facility remains unchanged and is based on the company’s election of a floating interest rate based on the prime rate or LIBOR plus an applicable margin which varies based on the company’s senior leverage ratio. The credit facility has a maturity date of June 2017.
“With these positive amendments and enhanced flexibility to our credit facility, we continue to undertake key steps to strengthen our balance sheet and position ourselves for our proposed REIT conversion which is expected to take place in January 2015,” said Keith Taylor, chief financial officer for Equinix.
Equinix connects more than 4,000 companies directly to their customers and partners inside its networked data centers.