Jefferies downgraded Digital 9 Infrastructure on Wednesday to ‘underperform’ from ‘hold’.
The bank said: “A stretched fund-level balance sheet, coupled with a material capex pipeline, is likely to entail DGI9 syndicating equity stakes in portfolio companies.
“Unfortunately, it would do this from a position of weakness and also likely compound risks to the dividend. Thus, we downgrade to underperform.”
Jefferies noted that DGI9 last reported revolving credit facility drawings of £356m and non-recourse vendor financing for the Arqiva acquisition of £163m, resulting in total debt of £519m, or 42% of gross asset value and 55% of net asset value.
“The current 40% discount to NAV will not support equity issuance, and while there is no immediate refinancing risk given maturities of March 2025 for the RCF and Oct 2026 for the vendor financing…we still see this as a stretched balance sheet,” it said.
Digital 9 is an investment company which invests in digital infrastructure.
At 1355 GMT, the shares were down 4.2% at 64.70p.
