The NEXTDC Ltd (ASX: NXT) share price is pushing higher today after the release of an announcement.
In morning trade the data centre operator's shares are up almost 1.5% to $12.05.
What did NEXTDC announce?
This morning NEXTDC announced that it has upsized its new senior debt facilities following a strong response in syndication from a diverse set of new and existing banks and institutional investors.
According to the release, the company has lifted its new senior debt facilities by $350 million to a total of $1.85 billion.
The release explains that the senior debt facilities will remain split across three tranches, each with a tenor of five years. This comprises $800 million for a term loan facility, $400 million for a capital expenditure facility, and $650 million for a multi-currency revolving credit facility.
NEXTDC expects the financial close for the senior debt facilities to occur prior to the redemption of the $800 million in unsecured notes on 9 December 2020.
Following redemption of the notes, on a pro-forma basis, the company will have liquidity of approximately $1.95 billion. This comprises cash of $893 million and undrawn debt under the new senior debt facilities of $1.05 billion.
NEXTDC's CEO and Managing Director, Craig Scroggie, commented: "The level of support from our existing and new lending partners has significantly exceeded expectations, with the revised debt facilities heavily oversubscribed."
"The ability to upsize this transaction highlights the quality, maturity, and resilience of the business that NEXTDC have built over the last ten years. NEXTDC now has an enhanced funding runway to continue to invest in our best-in-class facilities to support the growth of our customers in our key markets," he concluded.
Why is NEXTDC doing this?
When this debt deal was announced last month, management advised that the new facilities provide a significant improvement in NEXTDC's weighted average cost of debt and duration profile. Furthermore, they come with materially improved financial covenants and flexibility.
In addition to this, it also gives the company greater funding firepower as it executes on its development pipeline in the coming years to satisfy growing customer demand.
This could include an international expansion. At its annual general meeting this month, NEXTDC revealed that it now has offices in Singapore and Tokyo and is working with key customers and talking to respective governments about a potential expansion in the region.
At the event it also reconfirmed its guidance for FY 2021. The company's underlying EBITDA guidance remains $125 million to $130 million. This represents year on year growth of 20% to 24%.
