Q: Hi 5i,
I was reviewing BN's balance sheet it it appears to be carrying a LOT of debt. How concerning is this? TIA.
I was reviewing BN's balance sheet it it appears to be carrying a LOT of debt. How concerning is this? TIA.
5i Research Answer:
One should never 'dismiss' debt, but BN also has close to $0.5 Trillion in assets along with its $320B in obligation. But its financial situation is a reflection of its business. It is essentially a buyer of companies, and uses leverage to do so. But it manages this very well, and shares obligations with partners on deals. It spends a lot on interest charges, but has significant asset coverage and has doubled its asset base since 2018. It has to be watched, but we would not classify it as 'concerning' as it has significant assets it could sell, some easily, some less so.