Moody’s rates Equinix notes B1

Moody's Investors Service said it assigned a B1 (LGD5) rating to Equinix, Inc.'s proposed $1,125,000,000 unsecured notes.

Proceeds will be used to fund Equinix's proposed $3.6 billion purchase of certain data centers from Verizon Communications Inc. or for general corporate purposes.

The offering supplements the €1 billion term loan issuance completed in January.

Moody's said it does not expect the Ba3 corporate family rating to change as a result of the Verizon transaction, primarily because the company plans to raise equity to fund part of the purchase price.

The company's plan to raise a substantial amount of new equity helps balance what Moody's would otherwise view as a shareholder friendly financial policy, which features a high dividend payout that results in annual cash flow deficits, the agency said.

Consistent use of equity financing on a go forward basis, in conjunction with a pause in large M&A activity, could enable Equinix to achieve a higher rating despite its negative after-dividend cash flows.

Moody's said it anticipates that Equinix will complete the acquisition of assets from Verizon by mid-2017.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.