NextDC Raises A$1.1bn Through Convertible Notes
September 9, 2026 – 11:45 am
Credit: NEXTDC
NextDC is raising A$1.1bn (about $796M) through convertible notes to fund the expansion of its Australian data centers. This is the company’s third capital raise in four months.
The terms, reported by Reuters, include:
- Maturity: 17 September 2031, with conversion options in 2029.
- Conversion Price: Set at a 32.5% to 37.5% premium over a reference share price, with a floor of A$12.40.
- Capped Call Transactions: To mitigate potential dilution, with an indicative cap around 70% above the reference price.
Convertible notes are a common fundraising method for data center companies as they allow for future conversion to equity if the share price rises, while offering lower interest rates upfront. However, there’s a risk if revenue generation doesn’t keep pace with the debt.
NextDC’s aggressive capital expenditure plans, projected to reach A$5.25bn to A$5.75bn in the 2027 financial year (up 55% to 70% from the previous year), highlight the need for this funding.
Recent fundraising activities include:
- April: A** A$2.2bn capital plan** involving an entitlement offer and hybrid commitments.
- May: A** A$1.8bn senior debt** commitment from Australian and international banks.
Despite a third capital raise in a year, investors remain supportive, with NextDC shares closing 2.2% higher post the announcement.
This fundraising is seen as a testament to strong demand for data center capacity in Australia, as NextDC competes with other operators like Nvidia-backed Firmus, which is also expanding.