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 (read this guide) (learn more), 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.