NEXTDC Raises A$1.1B in Convertible Notes

The company expects fiscal 2027 capital expenditure of A$5.25 billion to A$5.75 billion, up roughly 55% to 70% from fiscal 2026, underscoring the scale of build-out required to secure capacity for AI workloads. That spending spree comes as Australian operators face mounting constraints on power and water access, two bottlenecks that can slow new data centre development and raise project costs.

The notes mature on Sept. 17, 2031, with a holder put option in September 2029. NEXTDC set the initial conversion price at a 32.5% to 37.5% premium to the reference share price and plans capped call transactions with an indicative cap price 70% above that level to soften the hit to existing shareholders if the bonds convert.

NEXTDC shares finished 2.2% higher at A$12.79 on Wednesday, as investors continue to back the sector’s long-term AI demand even as financing needs and infrastructure constraints rise. The stock’s technical setup remains mixed, with the shares trading near their 50-day moving average but below recent highs, while broader sentiment around AI infrastructure remains constructive despite volatility in the sector.

For investors, the key question is whether demand growth can outrun the rising cost of power, water and capital. The next catalyst is execution: delivery of new capacity, any further financing, and signs that Australian utilities and regulators can keep the AI build-out moving.