Treasurers are reporting a return to basics as their build their business resilience in a global environment of uncertainty and unpredictability, according to the 2025 corporate debt and treasury survey by Herbert Smith Freehills, in association with the ACT. In fact, nine out of 10 treasurers reported in the first quarter of this year that their key focus is on cash management. Activity in the corporate debt market has reportedly stalled as a result, with only those organisations that absolutely needed to raise finance currently coming to market.
“There is still so much uncertainty, there are so many moving parts still that most people are sitting on their hands,” said Sarah Boyce, policy and technical associate director at the ACT. “Instead, they are focused on making sure that they are managing their cash – looking at working capital, cash management, FX and interest rate management – and on being as resilient as they can be for whatever the next shock might be.”
According to the survey, only a quarter (24%) of treasurers reported that the current environment would have either no or only a minor impact on their debt strategy, down from 41% a year previously. This lack of a “business as usual” attitude has meant that many are adopting a “waiting and see” approach and are not dashing to market in the wake of the US administration’s 90-day standstill on the introduction of higher tariffs.
However, the survey notes that “bank loan markets have remained open throughout all of the turbulence”. Nevertheless, “a flight to quality” has meant that banks might not be equally enthused for all borrowers, with some spending more time building a syndicate.
Interestingly, the survey reports growing interest in trade finance, even though it remains a very low percentage of overall sources of funding. As the report says: “The diversification of supply chains has also encouraged trade finance solutions to support that part of the business.” Respondents this year have said trade finance solutions form an average of 6% of their debt portfolios where it had in the previous two years been negligible.
Kristen Roberts, head of the UK corporate debt practice at Herbert Smith Freehills, said: “Recent geo-political activity has disrupted global markets and economic uncertainty governs business activity. Corporate treasurers are used to adapting in the face of uncertainty and are readily deploying prudent debt strategies as needed; a recurring theme over the past few years.”
The survey found that 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%).
Commenting on whether the Bank of England’s recent 0.25 percentage point cut in its bank rate, Boyce said: “It was priced in, but it will be interesting to see whether [the Bank of England] cuts again, because originally people thought that they were going to cut often through the year. This is a reflection of the uncertainty, because the last thing the Bank will want to do is move and then find they have to move in the opposite direction later.”
Philip Smith is editor of The Treasurer