Ag Growth Intl Shares Down as Debt Concerns Prompt Downgrade by TD Cowen

By Adriano Marchese

Ag Growth International shares fell sharply Monday after TD Cowen downgraded the farm equipment maker, citing rising refinancing costs and pending debt maturities that will weigh on the stock.

Shares fell 22% to 7.50 Canadian dollars ($5.29). The stock is down 68% year-to-date and 80% over the last 12 months.

In a report on Monday, TD Cowen analyst Michael Tupholme downgraded the stock to hold from buy and lowered its price target by more than half to C$11 from C$23. The downgrade follows Ag Growth's proposal last week to raise interest rates to 9% from 5.25% on C$85 million of senior debentures due in December to extend their maturity to 2030.

Tupholme said the level of risk and expected cost associated with Ag Growth's ability to manage upcoming debt maturities--which includes one this year and two debt-to-share conversions next year--has risen considerably since early-August.

"We expect pending debt maturities to act as an overhang on the stock until clarity is obtained on AFN's refinancing plans," the analyst said, adding that he doesn't expect the situation to be fully resolved in the near term.

What's more, the analyst said the company's elevated leverage ratio has long been a central concern for investors, placing increased pressure on the balance sheet and ability to negotiate favorable terms for the upcoming maturities totaling about C$219 million.

"We believe risk/uncertainty has increased around how AFN will handle its two 2027 convert maturities ($115mm due Jun. 30, 2027; $104mm due Dec. 31, 2027), and we do not expect near-term clarity," he said.

Tupholme noted that even if underlying agriculture sector demand improves, it will likely be overlooked by investors until the balance sheet challenges are resolved.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

September 28, 2026 11:18 ET (15:18 GMT)