S&P/ASX 200 Index (ASX: XJO) tech stock NextDC Ltd (ASX: NXT) is charging higher today today.
Shares in the data centre operator and developer closed Friday at $16.26. In morning trade on Monday, they are changing hands for $16.53 apiece, up 1.7%.
For some context, the ASX 200 is up 0.2% at this same time.
This outperformance comes following the release of a major funding update.
ASX 200 tech stock marching higher on liquidity boost
The NextDC share price today is getting a boost today after the ASX 200 tech stock reported that it has signed $2.9 billion of senior bank debt facilities on a new common terms platform.
The company said it will use the new funds to refinance its existing debt facilities.
The new facilities are split across three tranches:
- A $1.5 billion five-year revolving facility maturing in December 2029
- A $400 million seven-year term loan facility maturing in December 2031
- A $1.0 billion seven-year revolving facility maturing in December 2031
Management noted that "The terms of the new facilities provide significant benefits, including the additional flexibility for the company to fund its longer-term growth ambitions through both the bank and bond markets."
As part of this refinance, the ASX 200 tech stock said it attained "material pricing reductions on equivalent tenor debt". NextDC will benefit from a significant improvement in its overall cost of funds.
Additionally, the company now has a longer timeline for repaying its loans.
The weighted average loan maturities have been extended from 2.2 years to 6.0 years.
According to management, this will provide "a more stable funding profile with no near-term maturities".
The company expects the financial close of the next facilities to occur in December.
Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB) are among the Australian and international banks that have arranged the loans.
NextDC tapping funding for data centre growth
NextDC said its pro forma liquidity position as of 30 June 2024 has improved to $3.4 billion after factoring in its September capital raising.
The ASX 200 tech stock has been on a cash-raising spree this year to fund its ambitious growth pipeline. In April, NextDC raised around $1.3 billion via institutional and retail capital, and September's capital raise raised another $750 million.
Commenting on the capital raise at the time, NextDC Craig Scroggie said:
While the company is already well placed from a liquidity perspective to continue to accelerate its development activities, it is becoming clear that opportunities for value accretive investment in the near term will continue to grow in accordance with our record pipeline and strong growth in the demand for cloud and AI services.
With today's intraday boost factored in, shares in the ASX 200 tech stock are up 36% in 12 months.
