Published by Herbert Smith Freehills and the Association of Corporate Treasurers, the Corporate Debt and Treasury Report delves into the development of, and outlook for, corporate debt and expenditure strategies at a time of high geo-political volatility. It also explores past and future considerations for treasurers’ roles.

The impact of macro-economic and geo-political events keenly felt at the beginning of 2025 has had a significant effect on debt strategies for the year in comparison to 2024. Far fewer respondents (24% in 2025, down from 41% in 2024) expected that macro-economic and geo-political events would have no or minor impact on their debt strategies. While some respondents had optimistically anticipated needing to raise debt to fund acquisition opportunities (14% in 2025, up from 8% in 2024), 11% of respondents in 2025, up from 8% last year, anticipated reducing debt requirements.

The US government’s tariffs policy has affected market confidence around the world. As one interviewee remarked: “There are lots of pent-up risks… anticipate dams breaking in 2025”. However, while mindful of the impact of tariffs and other macro-economic events, some companies may nonetheless continue with their expenditure strategies with one respondent commenting: “We’re business as usual – we have a large investment programme planned covering the next five years”.

Interest rates have not fallen as quickly as expected and, for many corporates, a higher cost of debt remains a key focus. Respondents cited the cost of debt as a key impediment to raising debt (28%), more so than economic uncertainty (23%) and tax/regulatory issues (14%).

Nonetheless, corporates and treasury teams have implemented effective strategies to manage the higher cost of debt while also looking to increase expenditure. A staggering 91% of respondents reported a focus on cash management to mitigate the cost of debt. As one respondent commented: “Although interest rates are in [a] downward trajectory, [having] low debt is the way forward”.

Stacey Pang, of counsel, comments: “Many corporates have been closely monitoring the loan and debt markets to seize opportunities to raise debt when the environment has been ripe. There are shorter timetables and an emphasis on deal execution as treasurers hope to lock in optimal pricing terms before the next unexpected macro-economic or geo-political event hits”.

AI is on, but at the bottom of, treasury teams’ agendas. In some cases, AI may be used for administrative tasks. However, few have implemented the technology directly in their roles. One respondent questioned the drain on resources, commenting: “What problem or issue would [AI] solve? We can’t spare the time to research, there’s enough on our plates!”.

“Treasury teams are not actively exploring AI’s potential role in their operations. Where AI is used, we are hearing that it is only trusted for low-risk administrative tasks. It seems that any significant use of AI is only likely to happen within the next few years rather than months”, adds senior associate Oliver Henderson.

Access the Corporate Debt and Treasury 2025 report.