Equinix Terminates Credit Line
Equinix (EQIX) said its data center construction schedule will not be affected by its recent termination of a $75 million credit line with Silicon Valley Bank and General Electric Capital Corporation. The company said in an SEC filing Friday that it had terminated the credit line on Feb. 29. The company had no borrowings under the agreement, and didn’t incur any penalties. “The termination of the Agreement will not impact Equinix’ expansion plans as a drawdown under this Agreement was not anticipated under its current operating plan,” the company said in its filing. “Equinix anticipates it will replace this line of credit during 2008.”
The termination comes at a time of tightening credit in the U.S. financial markets. Equinix is among the data center specialists who have said they are fully funded to complete their data center expansions.
Equinix has active construction projects in Chicago, Los Angeles, Santa Clara, northern Virginia, Paris and Sydney and just announced additional expansions in Hong Kong and Singapore. In a recent conference call with investors, company officials said Equinix expected that its cash flow and existing debt agreements will allow it to finish 2008 with between $175 million and $200 million in cash.
The market took Equinix’ announcement in stride, as shares of EQIX gained slightly on Friday, and are up about half a percent in early trading today.