SYDNEY, May 4, 2026, 08:03 AEST
- NextDC’s A$750 million subordinated notes sale drew a reported A$1.2 billion order book.
- The funding backs a faster buildout of its S4 Western Sydney data centre as AI and cloud demand rises.
- Planning, power and execution risks are now moving alongside the growth story.
NextDC Limited’s A$750 million subordinated notes sale drew A$1.2 billion in orders, The Australian reported on Sunday, giving the data-centre operator a fresh test of investor appetite for its AI infrastructure buildout. The notes were priced at 350 basis points over BBSW, the bank bill swap rate, a common Australian benchmark for floating-rate debt.
The timing matters. The report landed before regular ASX trading opened on Monday, when orders can be queued in pre-open but are not matched until the market opens, according to ASX trading rules. Investors get their first regular-session chance to weigh the bond demand against a larger, more complex funding plan.
NextDC is raising against a sharp jump in contracted demand, not a routine expansion. The company said contracted utilisation rose to 667 megawatts as of March 31, while its forward order book — contracted capacity not yet billing — increased to 544 megawatts, helped by demand from hyperscale and AI customers.
Chief Executive Craig Scroggie called the increase in contracted utilisation “unprecedented” and said the Western Sydney S4 project now needs faster development. NextDC said contracted EBITDA, or earnings before interest, tax, depreciation and amortisation, from existing contracts is expected to exceed A$1.0 billion over time, though that figure is forward-looking and depends on delivery. NEXTDC
The notes have a four-year tenor and mature on April 30, 2030. They rank below senior debt but above hybrid securities and ordinary shares, meaning senior lenders would stand ahead of noteholders if stress hits the capital structure; NextDC said the deal lifts pro forma liquidity, or cash plus undrawn facilities, to about A$6.6 billion.
Equity holders have already taken the first leg of the raise. NextDC said its institutional entitlement offer raised about A$1.0 billion at A$12.70 a share with roughly 98% take-up, while the retail component is expected to raise about A$0.5 billion and closes at 5 p.m. Sydney time on May 11.
The hybrid leg also brings in long-term capital. La Caisse, the Quebec-based global investment group, backed an A$1.0 billion hybrid securities offer in April, with its infrastructure head Emmanuel Jaclot saying the commitment would help underpin NextDC’s construction programme and support demand for digital infrastructure in Australia.
But the buildout is not happening in a vacuum. Guardian Australia reported rising local concern around NextDC’s M3 expansion in West Footscray, Goodman Group’s proposed 90MW Project Mars in Lane Cove and GreenSquareDC’s planned up-to-120MW Hazelmere project; NextDC said its project was being delivered in line with local and state processes and that it had channels to manage feedback.
The bigger balance sheet also changes the risk mix. A May 1 Simply Wall St note said NextDC’s new funding lowers near-term funding risk, but brings dilution, higher gearing limits and the need to earn acceptable returns on fresh capital to the front. That is the trade now: the company has more money to build, but less room for weak execution.
The next markers are plain enough: retail take-up, progress at S4 and the pace at which contracted megawatts turn into billing capacity. The order book shows demand for funding. Delivery will decide the rest.
