Australian Credit: NEXTDC Taps The Australian High Yield Market

NEXTDC Placement - Good Track Record but I Wouldn't Bet My House on the Placement

Director - Research, Consulting and Advisory, BondAdviser

Nicholas Yaxley

Director - Research, Consulting and Advisory

Australian bonds & fixed income research

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Credit

On the 8th of May 2017, NEXTDC Limited (under the terms and conditions set out in the information memorandum dated 8th of May 2017) launched a new issue, NEXTDC Notes III (ISIN: To be Confirmed). The notes are expected to be issued on the 9th of June 2017. The offer will raise a minimum of $200 million with the ability to take oversubscriptions up to $250 million. The proceeds will be used to redeem the group’s outstanding notes as well as the ongoing capital expenditure requirements of its existing and new data centre developments. These securities are sold to wholesale investors only (no prospectus being issued) and are not listed on the Australian Securities Exchange.These securities are structured as direct, senior unsecured notes and interest payments are non-discretionary, fixed rate and paid on a semi-annual basis in arrears. The coupon on this security is guided to be 6.50% p.a. and paid on the 9th of June and December each year until maturity or early redemption. The notes rank equally among themselves (but behind the undrawn senior secured bank facility provided by National Australia Bank) and at least equally with all other unsecured and unsubordinated obligations of the issuer. Investors are protected by financial covenants, event of default mechanisms, dividend restrictions and a negative pledge.NEXTDC has the right but not the obligation to redeem the notes prior to maturity at 101.5% of par value together with any accrued interest on the first call date (9th of June 2019) or on any interest payment date thereafter. The holder may request early redemption of the notes on the occurrence of a Change of Control event. The legal final maturity date of the notes is the 9th of June 2021 and the issuer must redeem the notes at 101.5% of par value together with the final interest payment.Summary details of the transaction are listed in the table below:

On the 8th of May 2017, NEXTDC Limited (under the terms and conditions set out in the information memorandum dated 8th of May 2017) launched a new issue, NEXTDC Notes III (ISIN: To be Confirmed). The notes are expected to be issued on the 9th of June 2017. The offer will raise a minimum of $200 million with the ability to take oversubscriptions up to $250 million. The proceeds will be used to redeem the group’s outstanding notes as well as the ongoing capital expenditure requirements of its existing and new data centre developments. These securities are sold to wholesale investors only (no prospectus being issued) and are not listed on the Australian Securities Exchange.These securities are structured as direct, senior unsecured notes and interest payments are non-discretionary, fixed rate and paid on a semi-annual basis in arrears. The coupon on this security is guided to be 6.50% p.a. and paid on the 9th of June and December each year until maturity or early redemption. The notes rank equally among themselves (but behind the undrawn senior secured bank facility provided by National Australia Bank) and at least equally with all other unsecured and unsubordinated obligations of the issuer. Investors are protected by financial covenants, event of default mechanisms, dividend restrictions and a negative pledge.NEXTDC has the right but not the obligation to redeem the notes prior to maturity at 101.5% of par value together with any accrued interest on the first call date (9th of June 2019) or on any interest payment date thereafter. The holder may request early redemption of the notes on the occurrence of a Change of Control event. The legal final maturity date of the notes is the 9th of June 2021 and the issuer must redeem the notes at 101.5% of par value together with the final interest payment.Summary details of the transaction are listed in the table below:

Nextdc Ltd

High Yield Credit: NEXTDC Notes III