“We understand that although energy prices have came off the peak and have stabilised, the high interest rate environment calls into question Cyxtera’s ability to continue expanding and growing, which has been once of the key drivers of its business strategy,” DBS says.
There has been some weakness in the price of Digital Core REIT (DC REIT) (SGX:DCRU
) this week. According to DBS Group Research, Cyxtera Technologies is one of DC REIT’s top 10 tenants accounting for 22.6% of gross rental income. Cyxtera Technologies is a data centre owner and operator in the US, and Asia-Pacific.
Last month, Bloomberg reported that Cyxtera is attempting to refinance a revolving credit facility that matures in November this year. “Fresh concerns on Cyxtera’s ability to service their debt obligations have surfaced, and most recently, Moody’s downgraded the company’s corporate family rating from B3 to Caa2. Moody’s cited that although they believed in Cyxtera’s underlying business fundamentals, they are concerned with the firm’s ability to service debt obligations in the medium term,” the DBS report says.
