UPDATE 1-Equinix prices $325 mln convertible notes offering

* To sell $325 mln convertible subordinated notes due 2016

* Interest payable semi-annually at 4.75 pct/year

* Sees net proceeds of about $273.1 mln

* Expects to use portion of proceeds for expansion

June 9 (Reuters) - Equinix Inc (EQIX.O), a provider of data centers and Internet exchanges, said it would sell $325 million of convertible subordinated notes due 2016.

Equinix said the interest on the notes will be payable semi-annually at a rate of 4.75 percent per year.

The initial conversion rate of the notes is 11.8599 shares of Equinix per $1,000 principal amount of notes.

This represents an initial conversion price of about $84.32 per Equinix common share, which is at a 17.5 percent premium to the last reported sale price of Equinix's common stock on Monday, the company said.

The company expects net proceeds from the offering to be about $273.1 million.

It plans to use part of the proceeds to fund expansion opportunities and to pay the cost of capped call transactions, which it entered into in connection with the offering.

Equinix also granted the underwriters an over-allotment option to purchase up to an additional $48.8 million aggregate principal amount of notes.

Shares of the company were down 56 cents at $71.20 in morning trade Tuesday on Nasdaq. (Reporting by Deepti Govind in Bangalore; Editing by Aradhana Aravindan)