What the SVB, Credit Suisse crises mean for Aussie investors

“Companies who will soon need to refinance in the debt market are particularly at risk in this environment – so the structure of a company’s balance sheet is an important consideration or potential red flag.”

The weekend The Australian Financial Review article by Lucy Dean and Alex Gluyas featured insights from Talaria Co-CIO Hugh Selby-Smith on the current banking crisis.

In the article Hugh notes that investors also need to pay particular attention to the financial leverage of any potential investments as the fall-out continues.

“The higher the total level of debt, excluding cash, will provide an indication of the risks around the repricing of the debt and widening credit spreads.

“In addition, businesses that provide a degree of financing to their customers – be it by carrying large amounts of inventory or lending on generous payment terms – are also at risk of having a liquidity issue,” Hugh said.

Read the full article here.