Equinix amends capped call transactions related to 4.75% convertibles

By Tali Rackner

Norfolk, Va., May 19 - Equinix, Inc. amended the capped call transactions that it entered into in connection with the issuance of its 4.75% convertible subordinated notes on May 13, according to an 8-K filing with the Securities and Exchange Commission.

The company recently issued common stock and cash in exchange for $170.2 million of the convertibles under exchange agreements reached with some holders on April 24 and May 1. Under the original terms of the capped call transactions, these exchanges would result in the termination of a number of call options equal to the number of notes, in denominations of $1,000 principal amount, being exchanged.

Under the amendment agreement, these call options will instead remain outstanding.

The amended call options have terms that are substantially similar to the terms of the original call options except that:

• The amended call options are European-style call options with an expiration date that corresponds to the maturity date of the notes;

• Each counterparty may transfer its rights and obligations under, or in certain limited circumstances terminate all or a portion of, the amended call options if that counterparty's ownership of the company's common stock exceeds certain thresholds; and

• In connection with any dilutive or concentrative event affecting the company's common stock, the cap price of the amended call options will be adjusted using standard, International Swaps and Derivatives Association-based provisions for over-the-counter equity options.

The counterparties to the capped call transactions are Deutsche Bank AG, London Branch, JPMorgan Chase Bank, NA, London Branch and Goldman Sachs & Co.

Equinix is a Redwood City, Calif.-based data services company.

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