REDWOOD CITY, CA - Equinix Inc. (NASDAQ:EQIX), a global real estate investment trust, announced on Monday the pricing of CHF 100 million in bonds, with a 1.55% annual interest rate and a maturity date of September 4, 2029. The issuance, by Equinix Europe 1 Financing Corporation LLC, a subsidiary of Equinix, is expected to close on September 4, 2024, subject to customary conditions.
The bonds, which will be unconditionally guaranteed by Equinix, are unsecured and unsubordinated obligations of both the issuer and Equinix. After accounting for interest rate hedges, the effective coupon rate of the bonds will be approximately 1.67%. The company has taken steps to mitigate the interest rate risk associated with the bonds.
Equinix plans to use the net proceeds from the bond offering to finance or refinance Eligible Green Projects, in line with its Green Finance Framework. These projects are part of the company's commitment to sustainability and environmental stewardship.
Until the proceeds are fully allocated to these projects, they may be used for general corporate purposes, including maintaining liquidity or repaying existing debts.
The bonds have been provisionally admitted for trading on the SIX Swiss Exchange, and Equinix will seek to list them according to the standard for bonds on this exchange.
The offering is directed only at international markets, as the bonds have not been registered under the U.S. Securities Act of 1933 and will be sold under Regulation S, which exempts them from registration requirements for transactions outside the United States.
This move by Equinix aligns with a growing trend among corporations to seek funding through green bonds, which are intended to encourage sustainability and the development of environmentally friendly projects.
In other recent news, Equinix, has reported an 8% year-over-year increase in revenues for the second quarter, totaling $2.2 billion. The company's performance is largely attributed to its xScale program and focus on artificial intelligence, which has attracted a total investment of $4.7 billion to date.
Following these results, Truist Securities raised its price target for Equinix to $935 from $915, maintaining a Buy rating. The firm's analysts also stand by their 2024 estimated EBITDA of $4,103 million, aligning with the company's guidance range. In addition, Deutsche Bank (ETR:DBKGn) increased its price target for Equinix to $910 from $880, citing an expected compound annual growth rate of 9% for adjusted funds from operations per share over a three-year period from 2024 to 2027.
Similarly, TD Cowen adjusted its price target for Equinix, increasing it slightly to $865 from $859, while also maintaining a Buy rating. These adjustments indicate a positive outlook on Equinix's financial performance and growth potential amid recent developments.
InvestingPro Insights
In light of Equinix Inc.'s (NASDAQ:EQIX) recent bond pricing announcement, investors may be interested in the company's financial health and market performance. As of the last twelve months up to Q2 2024, Equinix boasts a solid market capitalization of 77.48 billion USD, underscoring its substantial presence in the market. The company's revenue growth during this period has been positive, with an 8.05% increase, reflecting its capacity for expansion and potential to fund green initiatives through internal resources.
Moreover, Equinix's commitment to sustainability is not only reflected in its green projects but also in its financial returns, with a dividend growth of 24.93% in the same timeframe. This indicates a strong potential for long-term investment returns. For investors looking at the company's recent market activity, Equinix has experienced a 3.26% year-to-date price total return, which could be appealing for those interested in the company's stock performance.
InvestingPro Tips suggest that while Equinix's P/E ratio stands at a premium of 74.46, indicating a higher valuation compared to some peers, the company's consistent revenue growth and commitment to sustainability could justify the valuation for forward-looking investors. Additionally, the InvestingPro product offers further insights, with 15 additional tips available for investors seeking a comprehensive understanding of Equinix's investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.