NEXTDC Launches $1B Hybrid Offer Backed by Binding $1B Commitment from La Caisse
NEXTDC launches $1 billion hybrid securities offer backed by global infrastructure investor
NEXTDC has launched a $1.0 billion NEXTDC Hybrid Securities Offer supported by a binding commitment from La Caisse, a Québec-based global investment group. The offer provides flexible, long-term capital to support the company’s contracted forward order book through FY29, whilst positioning pro-forma liquidity at approximately $5.2 billion as at 31 December 2025.
The hybrid securities are deeply subordinated instruments that rank junior to all existing and future debt obligations, senior only to ordinary shares. There are no equity conversion features, meaning existing shareholders face no dilution risk from the transaction.
La Caisse partnership signals long-term infrastructure validation
La Caisse, a global investment group with net assets totalling CAD $517 billion as at December 2025, has committed to apply for the full $1.0 billion offer size. The commitment is described as a “promising first step toward a long-term partnership” between the two organisations.
Emmanuel Jaclot, La Caisse’s Executive Vice-President and Head of Infrastructure and Sustainability, highlighted the strategic rationale for the commitment.
Emmanuel Jaclot
“This commitment will help underpin NEXTDC’s construction program, supporting growing demand for digital infrastructure in Australia and adding to La Caisse’s long track record in partnering with high-quality infrastructure operators through their growth phase.”
La Caisse’s final allocation of hybrid securities will be determined following the conclusion of the offer and may be less than its initial commitment. The company is now offering the securities to a group of institutional investors, with closing expected on or about Thursday, 23 April 2026.
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What are hybrid securities and why do they matter for NEXTDC?
Hybrid securities combine characteristics of both debt and equity, offering companies flexible capital without the restrictions of traditional senior debt. For growth companies like NEXTDC (ASX: NXT), hybrids provide several strategic advantages. The instruments are expected to be tax deductible and classified as debt for accounting purposes, whilst sitting outside the company’s senior debt covenants.
The securities carry a 100-year maturity with a five-year non-call period, providing NEXTDC with long-term capital stability. During the first five years, a lower cash coupon enhances near-term cash flow flexibility. The company also retains the ability to defer coupons at its election, subject to certain conditions, providing additional financial flexibility during periods of capital-intensive development.
Critically, there are no equity conversion features associated with the hybrid securities. This preserves the ownership structure for existing shareholders whilst enabling NEXTDC to access substantial growth capital. The deeply subordinated nature means the securities rank junior to all existing and future debt obligations of the group, including senior debt facilities and any potential wholesale notes issue.
Key terms at a glance
| Term | Detail |
|---|---|
| Issue size | $1.0 billion |
| Initial coupon | 7.50% p.a. (fixed, first 5 years) |
| Step-up coupon | 9.20% p.a. from year 5 |
| Maturity | 100 years |
| Redemption | Callable with cash after 5 years |
The coupon structure includes a 7.50% per annum fixed rate for the first five years, stepping up to 9.20% per annum from year five. Further incremental step-ups apply through to year 10, with an additional 5.00% step-up at the end of year 10. If the securities are not redeemed at the end of year five, a one-off special coupon is also payable, calculated so that the total yield for years one to five equals 9.20% per annum.
In the event of a change of control, the issuer retains a redemption right with a 5.00% coupon step-up if the securities are not redeemed. A one-off coupon may also be payable, subject to a minimum return threshold expressed as a multiple of invested capital.
Pro-forma liquidity positions NEXTDC for contracted growth
Inclusive of the hybrid securities offer, NEXTDC will have pro-forma liquidity of approximately $5.2 billion as at 31 December 2025 (before transaction costs). This substantial liquidity runway supports the company’s capital-intensive development pipeline and contracted forward order book through FY29.
The strengthened balance sheet comprises:
- Cash position: $278 million (31 December 2025)
- Undrawn debt capacity: $3,940 million
- Hybrid securities proceeds: $1.0 billion
- Total pro-forma liquidity: ~$5.2 billion
The diversified funding structure reduces refinancing risk whilst providing NEXTDC with the capital flexibility to pursue further investments across its portfolio of new projects. The company has indicated it may also pursue a subordinated notes issue in the Australian dollar wholesale debt market (Wholesale Notes) to further strengthen its long-term capital position and diversify its funding pool.
Any wholesale notes issuance is expected to occur after completion of the hybrid securities offer and remains subject to prevailing market conditions. Such notes would rank senior to the hybrid securities in the company’s capital structure.
CEO perspective on the funding strategy
Craig Scroggie, NEXTDC’s Chief Executive Officer and Managing Director, positioned the hybrid securities offer and La Caisse commitment as validation of the company’s growth strategy and delivery capabilities.
Craig Scroggie
“The announcement of the Hybrid Securities Offer and the La Caisse commitment represent another step toward NEXTDC delivering on a material step-change in the scale of our business as we deliver on the Company’s contracted forward order book across the period to FY29 and make further investments across the portfolio of new projects. We are delighted with this binding commitment from La Caisse, a long‑term investor with deep experience in infrastructure, as further validation of our growth strategy.”
The hybrid securities are expected to be tax deductible and classified as debt for accounting purposes, enhancing their attractiveness as a funding mechanism. The structure sits outside the company’s senior debt covenants, providing additional operational flexibility during the execution phase of NEXTDC’s development programme.
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Timeline and next steps
The hybrid securities offer is expected to close on or about Thursday, 23 April 2026, with settlement and issuance expected to occur shortly thereafter. Settlement is conditional only on matters within the company’s control or for which NEXTDC has a high degree of confidence in achieving satisfaction on reasonable grounds.
Key execution milestones include:
- Offer closing: ~23 April 2026
- Settlement: shortly after closing
- Wholesale Notes: potential follow-on issue, timing subject to market conditions
La Caisse’s allocation of hybrid securities will be determined following the conclusion of the offer and may be less than its $1.0 billion commitment. The company is currently offering the securities to a group of institutional investors, with Barrenjoey acting as sole Structuring Adviser, Lead Manager and Offer Agent.
The near-term execution timeline positions the capital for deployment in the current quarter, supporting NEXTDC’s ongoing data centre development programme and capacity expansions. Additional funding optionality through a potential wholesale notes issue maintains strategic flexibility for future capital requirements.
Ready to Learn More About NEXTDC’s $1.0 Billion Capital Raise?
NEXTDC’s hybrid securities offer represents a significant validation of Australia’s digital infrastructure growth trajectory, backed by one of the world’s largest institutional investors. The deeply subordinated structure provides long-term capital without diluting existing shareholders.
To access NEXTDC’s full investor materials and explore the company’s contracted forward order book through FY29, visit the NEXTDC investor centre for comprehensive analysis and project updates.