Andrew Bascand, Shane Solly | Posted on Jan 28, 2019

One of the driving factors behind the global financial crisis (GFC) was high levels of company debt. High leverage and lower earnings coverage of interest costs heightened risk in the US equity market. Recently published research by a global investment bank[*]  suggests that US company debt levels may be creeping up again. But are we seeing the same thing happen in New Zealand?

Research by Harbour indicates that the median New Zealand (NZ) listed company debt levels are relatively modest and that the NZ market generally has conservative balance sheets.

This isn’t so for all listed NZ companies – but the median NZ company, and the NZ market in general, has displayed significant deleveraging relative to the pre-GFC period, and even on average over the last 4 years.