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Refinancing risk will be the buzz word this year as Australia's corporate sectors attempts to refinance up to a trillion-dollars in foreign debt.
Reasons are straight-forward:
1. banks now think about risk first (as it should be when you think about it) before writing a loan;
2. foreign banks, who are owed about a lazy trillion by Australia's corporates, are in the poo and being nationalised as we speak. Governments will be asking 'why have you got a billion-dollar exposure to Australia, a non-core voter market'? So as the syndicates roll-over, the Santanders, BOS, JP Morgans, ABN Amros etc will be saying 'squeeze ya later'.
3. the nasty, yucky credit crunch is still amongst us, even though it is slowly showing signs of thawing. The 'tyranny of distance' means it will first stimulate the yanks, then the japanese, then europe, then asia, and then us. However New Zealand is lower in the pecking order - phew!
Anyway, ranting aside, here is a list of companies that might be wishing that they had not bought into the 'short-term debt, long-term investment timeframe' paradigm to save investors a few bob -
From The Age article:
OZ Minerals
Wesfarmers
Boart Longyear
Primary Health Care
Macquarie Group and virtually all its legion of 'satellites'
Sigma Pharmaceuticals
Boral
CSR
Orica
Tabcorp
et al - basically any company with debt maturing in the next two years. They all had the same structure - get a Big4 to quarterback a global syndicate!
http://business.theage.com.au/business/getting-loan-now-big-hurdle-20090121-7mt6.html
Be interesting to revisit this list in 12-months. Feel free to add to the list.
As always, IMO and my 2c and do not take anything I say as advice, yada yada
PS: a quick guide for pundits is to look at the accounting notes in a companies Annual Report - there should be a schedule in there that lists when debt is due ie >1yrs, 1-2 yrs, 2-5 yrs, 5+ yrs.
Reasons are straight-forward:
1. banks now think about risk first (as it should be when you think about it) before writing a loan;
2. foreign banks, who are owed about a lazy trillion by Australia's corporates, are in the poo and being nationalised as we speak. Governments will be asking 'why have you got a billion-dollar exposure to Australia, a non-core voter market'? So as the syndicates roll-over, the Santanders, BOS, JP Morgans, ABN Amros etc will be saying 'squeeze ya later'.
3. the nasty, yucky credit crunch is still amongst us, even though it is slowly showing signs of thawing. The 'tyranny of distance' means it will first stimulate the yanks, then the japanese, then europe, then asia, and then us. However New Zealand is lower in the pecking order - phew!
Anyway, ranting aside, here is a list of companies that might be wishing that they had not bought into the 'short-term debt, long-term investment timeframe' paradigm to save investors a few bob -
From The Age article:
OZ Minerals
Wesfarmers
Boart Longyear
Primary Health Care
Macquarie Group and virtually all its legion of 'satellites'
Sigma Pharmaceuticals
Boral
CSR
Orica
Tabcorp
et al - basically any company with debt maturing in the next two years. They all had the same structure - get a Big4 to quarterback a global syndicate!
http://business.theage.com.au/business/getting-loan-now-big-hurdle-20090121-7mt6.html
Be interesting to revisit this list in 12-months. Feel free to add to the list.
As always, IMO and my 2c and do not take anything I say as advice, yada yada
PS: a quick guide for pundits is to look at the accounting notes in a companies Annual Report - there should be a schedule in there that lists when debt is due ie >1yrs, 1-2 yrs, 2-5 yrs, 5+ yrs.
