NextDC Raises AU$1.1B Through Convertible Notes

Australian data center operator NextDC is raising AU$1.1 billion (US$796 million) through convertible notes to fund its digital infrastructure expansion. The latest fundraising marks the company’s third capital raise in just over four months. Convertible notes allow companies to raise debt that can later be converted into equity.

The notes allow NextDC to raise capital without immediately issuing new shares and diluting existing holdings. They have become increasingly popular among data center operators seeking funding for large construction projects, as firms expect rising demand for AI services to boost their share prices. The notes mature on September 17, 2031, with lenders able to convert them into shares at AU$16.69 ($11.97), representing a 32.5% premium over NextDC’s AU$12.60 ($9.04) reference price.

Craig Scroggie, CEO of NextDC, said: “The transaction provides NextDC with efficient, committed, funding for our development pipeline, and diversifies NextDC’s sources of funding with a new, deep, global investor base, whilst preserving our senior debt capacity and balance sheet flexibility.”

NextDC operates or is developing 20 data centers across Australia, with additional sites planned or under evaluation in Japan, Thailand, Malaysia, and Singapore. Its customers include OpenAI, which will take capacity at the upcoming S7 data center in Sydney.