As corporate treasurers batten down for a period of low growth, they are also reviewing their debt raising strategies. According to a new report from law firm Herbert Smith Freehills Kramer in partnership with the Association of Corporate Treasurers entitled Corporate Debt and Treasury Report 2026: Navigating Persistent Volatility Economic, uncertainty will be a more significant constraint on debt-raising activity than market access itself: for many organisations the more fundamental question is whether additional debt is required at all, particularly in the context of limited growth prospects.
Stacey Pang, a corporate finance lawyer at HSF Kramer and who led the report, says: “Overall, the results suggest a muted appetite for growth and expansion which is not surprising given the current macro-economic and geo-political landscape. Corporate treasurers are instead seeking to repay debt and effect share buybacks, perhaps in response to the higher costs of debt and the lower expected levels of M&A activity and to build in balance sheet resilience.”
Treasury teams are not expecting a systemic credit shock, but they are prioritising resilience and the ability to absorb shocks as they arise, continue the authors. Citing treasurers’ comments like “the age of stability is gone” and “disruption is BAU” or descriptions of volatility as both “relentless” and an “omni-crisis,” headline findings show that corporates are most focused on ensuring all funding decision-making is framed within the context of early preparation, execution certainty and balance sheet resilience: raising new debt to fund expansion is not a priority.
Moreover, debt diversification is also a priority as companies seek to improve flexibility and access to liquidity.
Decrease in debt capital market issuance
In one noticeable trend, the survey flags a decrease in debt capital market issuances and an increase in debt raised in the private placement market. It’s a combination that suggests that treasurers are not abandoning traditional bank and bond markets; rather, they are layering in additional tools, especially accessing the private placement market, trade finance and alternative lenders to improve flexibility and access to liquidity pools.
Kristen Roberts, Managing Partner and Head of the UK Corporate Debt Practice, comments at the law firm: “Treasury teams have adapted to sustained volatility by embedding uncertainty into core decision making. Rather than viewing disruption as episodic, corporate treasurers now treat uncertainty as a baseline assumption in liquidity management, funding strategy and risk calibration.”
Report interviewees reflected that the increased cost of debt affects timing rather than quantum.
In public markets, successful placings result from issuers who have prepared in advance to go to market when the window of opportunity arises. It means some companies are choosing not to raise additional debt too far in advance – although others are also willing to refinance early for certainty. The report finds that many businesses are in a consolidation phase, maintaining optionality for M&A and growth but without any strong indications that such opportunities will materialise in 2026. Other strategies include returning cash to shareholders where balance-sheet strength and a lack of compelling investments make this the most attractive option.
Many corporates also appear to have well-developed interest rate and currency hedging strategies in place. Corporates’ use of interest rate derivatives remains comparatively high, reflecting the general perception of ‘higher-for-longer’ interest rates, although some may not have such rigorous policies for commodity, energy and inflation-linked derivatives.
Notwithstanding the current macro-economic and geo-political landscape, 72% of respondents (up from 41% last year) reported that their businesses would operate “business as usual but with some continued disruption” and 50% of respondents (up from 24% last year) thought there would be no or minor impact on their debt strategies. These results may be explained by consistent and prudent management by corporate treasurers who are already factoring in longer lead times for debt raising processes and have taken a longer-term view on debt requirements and maturity profiles, says the report.
