Equinix snaps up $1.06B loan to fund Verizon data center deal

A data center
Equinix has secured additional funding for its pending acquisition of Verizon’s data center assets and decreased the borrowing cost of its existing debt.

Equinix has secured $1.06 billion in additional funding via senior secured term B loans for its pending $3.6 billion acquisition of Verizon’s data center assets.

The company also decreased the borrowing cost of its existing senior secured term loan B facility.

Equinix said the interest rate margin applicable to the loans borrowed under the Term B-1 Facility in U.S. dollars (of which $248,125,000 were outstanding as of Dec. 31, 2016) was reduced from 3.25% to 2.50% and the LIBOR floor applicable to such loans was reduced from 0.75% to zero. 

RELATED: Equinix purchases Verizon's data centers for $3.6B, enhances interconnection portfolio

"Our ability to opportunistically access the European debt markets has enabled Equinix to secure low-cost, long-term funds for a portion of Equinix's purchase of Verizon's data center sites and operations,” said Keith Taylor, CFO of Equinix, in a release. “This Euro-denominated debt also provides a natural hedge to protect the economic value of our European investments.” 

Bank of America Merrill Lynch acted as lead left arranger for the transactions.

While Equinix has never been one to shy away from acquiring other assets, the Verizon acquisition is significant in terms of its size and scope.

In particular, Equinix will immediately scale its data center footprint by adding 24 sites consisting of 29 data center buildings across 15 metro areas. 

Equinix said that the addition of these facilities and customers will further strengthen the data center providers’ global platform by increasing interconnection in the United States and Latin America; opening three new markets in Bogotá, Culpeper and Houston; and accelerating Equinix's penetration of the enterprise and strategic market sectors, including government and energy.

Another benefit of the acquisition is customers. After completing the deal, Equinix will gain about 900 additional customers, the majority of which are enterprises.

The acquisition also better positions Equinix to be a stronger partner for content providers that need more interconnection options to the internet.

Equinix will now operate the NAP (Network Access Point) of the Americas facility in Miami. This facility has become a key interconnection point and will become a strategic hub and gateway for Equinix customer deployments servicing Latin America.

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