LPC-Equinix doubles acquisition loan to €1 billion

The logo of Equinix is pictured at the entrance of a data center in Pantin, outside Paris, France, December 7, 2016. REUTERS/Benoit Tessier

LONDON (Reuters) - US data center operator Equinix EQIX.O has doubled the size of a leveraged loan it is raising to back its acquisition of data centers from Verizon Communications VZ.N, increasing it to €1bn and tightening pricing following overwhelming investor demand, banking sources said on Wednesday.

The company announced earlier this month it would acquire 29 data centers in the US and Latin America for US$3.6bn.

Equinix originally planned to back the acquisition with a €500m term loan and a mix of equity and bonds. The increase in the term loan will mean the company will now purchase the data centers with less equity and bonds, the sources said.

Bank of America Merrill Lynch leads the financing, with the €1bn term loan B now offered at par, compared to a 99.75 OID guided at launch. An interest margin of 325bp over Euribor and a 0% floor remain unchanged.

The company is also seeking to amend and reprice an existing US$248m term loan and a US$388m-equivalent sterling-denominated term loan.

Pricing on the dollar term loan is guided at 250bp-275bp over Libor, with a 0% floor at par, while the sterling-denominated loan is guided at 300bp-325bp over Libor, with a 0.75% floor at par.

The euro, dollar and sterling term loans, which mature in 2023, will have 101 soft call protection for six months.

Lenders have been asked to recommit to the financing by noon on December 15 on the new euro term loan and existing sterling loan, and by 5pm on December 14 for the existing dollar loan.

Corporate ratings are Ba3/BB+ and the term loan ratings are Ba2/BBB- .

Editing by Christopher Mangham