NextDC (ASX:NXT) shares closed 9.4% higher at A$6.29 on Wednesday 28 October 2026, the best performance in the ASX 200, according to IBTimes. The data centre operator eased fears about its debt, while a substantial holder notice showed Canada’s biggest pension fund buying near the bottom of last week’s crash.
NextDC eases debt fears
NextDC crashed 42% on 21 October after a power delay at its M3 Melbourne data centre forced a deep cut to FY27 guidance. Investors worried the cut could put pressure on its loans.
According to its covenant update, NextDC had plenty of headroom at 30 June:
| Covenant | NextDC | Limit |
|---|---|---|
| Interest cover (pro forma) | 5.91x | At least 1.5x |
| Gearing | 8.2% | No more than 60% |
NextDC said it complied with both covenants at 30 June and expects to comply again at 31 December. It also had A$8.675 billion of liquidity at 30 September, including A$1.275 billion in cash.
The interest cover figure is pro forma and not certified, and NextDC warned it is not a measure of how much senior debt it can draw.
The insider angle: CPP Investments buys in
According to a substantial holder notice, the Canada Pension Plan Investment Board became a substantial holder on 26 October:
- Shares held: 39,726,216, or 5.23%
- Purchase that took it over 5%: 2 million shares on 26 October at an average of about A$5.48
- Earlier purchase: 47,867 shares on 6 August at about A$14.21
At A$6.29, the 26 October purchase is already about 15% in profit, and CPP Investments’ full stake is worth about A$250 million.
The CEO and board take a pay cut
In a board update on 26 October, NextDC said:
- CEO Craig Scroggie will give up his FY27 short-term and long-term incentives, with nothing paid in their place
- Non-executive directors have cut their fees by 10%, effective immediately
- Chairman Douglas Flynn will retire once a new chair is appointed, expected in early 2027
A planned increase in the directors’ fee pool has been withdrawn.
Still a long way down
Even after rising about 18% from the A$5.35 crash low, NextDC shares are well below where many investors bought. April’s capital raising was priced at A$12.70, and those investors are still down about 50%.
The sell-off also hit data centre contractors such as Southern Cross Electrical, which has since bounced back too.
What NextDC investors should watch
- The 20 November AGM, which includes a possible board spill vote
- Updates on M3 Melbourne power and customer contracts
- Substantial holder notices from other large funds
- The 31 December covenant test
Bottom line
NextDC’s update showed its loans are not under immediate pressure, and a major pension fund bought in at the lows. As with Applied Digital’s insider buying, big buyers stepping in after a crash can be a signal worth watching, but the M3 delay still clouds NextDC’s outlook.
