Corporate treasurers are treating persistent volatility less as a passing disruption and more as a permanent feature of balance-sheet management, with companies prioritising refinancing certainty, cash discipline, risk management and debt repayment over expansionary investment. Published in May by Herbert Smith Freehills Kramer, in collaboration with the Association of Corporate Treasurers, the 2026 Corporate Debt and Treasury Report points to a treasury community that has become more accustomed to macro shocks but not complacent about them. 

The survey, conducted among finance and treasury professionals at UK corporates, primarily FTSE 100, FTSE 250 and equivalent businesses, was launched in early January, before the conflict in the Middle East. Follow-up interviews in late February and March then captured how treasurers were thinking about the impact of the crisis on debt strategy, energy prices and market access.

That timing matters. The survey data reflects views before the latest shock had fully worked through markets, but the interviews suggest a deeper shift already underway. Treasurers are no longer planning for volatility as an interruption to normal conditions. They are building debt, liquidity and risk strategies around the assumption that disruption is now part of the operating backdrop.

Survey responses show a sharp increase in those expecting “business as usual [BAU] but some continued disruption anticipated”. That share rose to 72% in 2026, from 41% in 2025 and 52% in 2024. At the same time, the proportion reporting a material negative impact from macroeconomic and geopolitical events fell to 8%, from 17% in 2025 and 12% in 2024.

Falling concern about the negative impact does not necessarily mean companies are more optimistic. The share reporting BAU and positive outlook fell to 14%, from 25% in 2025 and 24% in 2024. Instead, the data suggests a more pragmatic position: disruption is expected, managed and absorbed, but it is no longer seen as sufficient reason to overhaul the whole debt strategy.

Interviewees captured the mood bluntly. One respondent said “Disruption is BAU.” Another said “the age of stability is gone,” with major macroeconomic and geopolitical events now occurring every few months rather than every few years.

Refinancing moves earlier

Debt strategy reflects the shift from shock response to structural preparation. Half of respondents said macroeconomic and geopolitical events would have no or only a minor impact on their 2026 debt strategy, a marked increase from 24% last year. That confidence appears to stem partly from longer planning cycles, earlier refinancing work and more deliberate maturity management.

Longer runways are now being built into refinancing plans. Rather than wait for calm conditions, treasurers are preparing in advance and moving when market windows open. In public markets, successful issuance has depended on companies being ready to move quickly when investor appetite is available. In private markets, particularly for longer-term debt, some corporates have used bridge financing as a temporary solution until conditions improve.

Market access is not translating into an especially aggressive debt environment. Only 4% of respondents said they intended to increase debt requirements to fund acquisitions, down from 14% in 2025 and 8% in 2024. Just 4% planned to raise equity. The proportion expecting to increase debt for working capital purposes fell to 7%, while only 3% planned asset disposals to raise funds, down from 8% last year.

Many companies appear to be questioning whether they need more debt at all. Economic uncertainty is the largest cited impediment to raising debt, at 33%, up from 23% in 2025. Increased cost of debt remains the second-largest barrier, at 22%, although this has eased from 28% last year, suggesting some normalisation of higher borrowing costs.

Higher rates still matter, but the more fundamental constraint may be the absence of compelling growth uses for new borrowing. The report says the results are “not consistent with a high growth economy”, a phrase that runs through the findings on funding mix, expenditure plans and treasury priorities.

Current funding patterns also show a cautious form of diversification. Bank debt remains the anchor of corporate capital structures, accounting for an average 44% of respondents’ debt funding at the start of 2026. That is down from 52% in 2025 but still above the 41% recorded in 2024.

Debt capital markets have become a smaller share of the mix, falling to 26% from 28% in 2025 and 40% in 2024. Private placements have risen to 19%, from 12% in each of the previous two years, while trade finance has edged up to 7%, from 6% in 2025 and negligible levels in 2024.

Plans for new debt raising tell a slightly different story. Respondents expected the largest debt raisings in 2026 to come from debt capital markets, cited by 59%, followed by trade finance at 39% and bank debt at 31%. Refinancing activity is expected to be led by private placements, at 70%, followed by trade finance at 61% and bank debt at 42%.

The survey evidence suggests that treasurers are not abandoning traditional bank or bond markets. They are layering in additional options, particularly private placements, trade finance and selective alternative funding, where these improve flexibility or access to liquidity.

Debt diversification itself divides respondents almost evenly. Some 45% see it as a priority, while 55% do not. The split points to two different treasury realities. Companies with greater concern over liquidity, market access or funding concentration are exploring additional sources. Others, especially cash-rich businesses or those with simple capital structures, see little reason to add complexity.

Cash goes to debt, not deals

Expenditure data gives the clearest signal that corporates are consolidating rather than expanding. Only 25% of respondents expect higher spending on acquisitions in 2026, down from 38% in 2025. Expected higher capital expenditure has also fallen sharply, with 35% planning to spend more, compared with 51% last year.

Acquisition and capex caution contrasts with a stronger focus on deleveraging. Some 38% expect higher spending on debt repayment, up from 27% in 2025 and 22% in 2024. Shareholder returns are also moving up the priority list: 34% expect to spend more on dividends, up from 25% last year, while 27% expect higher spending on share buybacks, up from 21%.

By implication, the aggregate picture is one of balance-sheet defence. Companies are still investing, but at lower levels. They are paying down debt more actively, where higher borrowing costs make leverage less attractive. They are preserving M&A optionality, but there is no clear evidence that deal activity will materially accelerate this year.

Read alongside the debt strategy findings, the survey points away from a broad revival of debt-funded expansion. The share of corporates intending to raise debt to fund acquisitions has fallen to 4%, while only a small number plan to raise equity. Instead, respondents appear more focused on consolidation, repayment and resilience.

Several respondents said they have cash surpluses but no acquisition plans, preferring to reduce debt or maintain current leverage. Others noted that some companies are structurally ready to execute M&A, with facilities and capacity in place, but do not expect to do so in practice in 2026.

Market commentary has often suggested that lower valuations could create acquisition opportunities. In the survey, any M&A appetite appears highly sector-specific. Some companies remain acquisitive, often funding deals from cash flow, but the broader data points away from debt-funded expansion.

Net debt plans reinforce the point. The share of respondents planning to increase overall net debt fell to 47% in 2026, from 51% in 2025, while those intending to reduce net debt rose to 34%, from 27% last year and 29% in 2024. Only 19% expected no change.

For treasurers, the question is not simply whether debt markets are open. It is whether growth prospects justify taking on more debt at higher cost and in a more volatile macro environment. For many, the answer appears to be no.

Risk management is another area where caution is visible. Interest rate derivatives remain widely used, reflecting concern over higher-for-longer rates. In 2026, 32% of respondents expect to use more interest rate derivatives, the same proportion as in 2025, while 37% expect no change and 28% do not use them.

Currency derivatives show a more striking increase. Some 41% expect to use more FX derivatives in 2026, up from 32% in 2025 and 27% in 2024. The report links this to supply chain and foreign exchange risks across markets, as currency volatility continues to affect debt strategy, procurement, and international operations.

Commodity, inflation-linked and energy derivatives remain less widely used. Only 10% expect to use more commodity derivatives, while 61% do not. For inflation-linked derivatives, just 3% expect to use more and 73% do not use them. Energy derivatives show 10% expect to use more, while 66% do not use them.

Exposure management is still broader than the use of financial derivatives alone. The report notes that some corporates prefer contractual arrangements with suppliers, such as forward pricing, over financial derivatives, particularly where markets are thin or operational exposures are complex. Companies heavily exposed to oil and energy shocks may already have hedging in place, but the longer-term effect will depend on what happens when existing hedges roll off.

Treasury’s remit widens

Cash management remains treasury’s core priority, but its dominance has fallen. In 2025, 91% of respondents selected cash management as one of the top three treasury priorities. In 2026, that figure fell to 71%. That drop from 91% should not be read as cash becoming less important. The report suggests the opposite may be true: cash management has been such a central focus in recent years that many companies have already invested in treasury management systems, processes and controls, allowing attention to shift to other priorities. One interviewee noted that “money is harder to get, and cash forecasting becomes so much more important”.

Around that core liquidity role, a broader risk and technology agenda is taking shape. AI was selected as a top-three treasury priority by 35% of respondents in 2026, compared with 47% in 2025. Derivatives rose to 35% from 9%, while diversification of debt rose to 29% from 9%. Interest rates were selected by 32%, supply chain by 26% and cyber security by 26%.

AI and automation are being viewed through a practical lens. Respondents identified cash flow forecasting as the leading area where AI and technology could provide solutions, alongside daily cash management, operational efficiency, automation of recurring tasks, fraud prevention, KYC and bank onboarding, compliance reporting and better information on facilities and derivatives.

Respondents are not treating AI as a fully mature treasury tool. Several corporates said the technology is promising, but has not yet become reliable enough for core financial decision-making. The obstacles are familiar: data quality, standardisation and confidence that outputs are strong enough to support decisions.

Human judgement remains central. One interviewee said it is “hard to get away from the fact you need people who can make judgements”, particularly in a volatile geopolitical and interest-rate environment. Another said team structure and skills would have been selected as a key focus if that had been offered as an option.

Cybersecurity is another area where treasury’s role is expanding. Some 26% selected it as a top-three priority, with interviewees emphasising preparation, resilience and recovery planning. The question is no longer whether breaches will occur, but whether the business model can withstand them.

Sustainability, by contrast, has slipped down the immediate treasury agenda. Only 6% selected it as a top-three focus for 2026. The report is careful not to suggest that sustainability has disappeared. Some respondents said their organisations will continue to push the agenda regardless of political shifts. Others noted that ESG is attracting fewer questions during investor roadshows, as geopolitical risk and financial resilience dominate discussions.

In that context, sustainable finance remains part of the toolkit, but it no longer defines the treasury conversation the way liquidity, rates, cybersecurity, technology, and operational resilience do.

Overall, the treasury function has become more central, not narrower, as the environment has grown more challenging. Treasurers are guarding liquidity, managing debt and derivatives, testing technology, monitoring cyber and supply chain risks, and helping companies decide how much balance-sheet risk they can afford.

The report’s findings do not suggest a systemic credit shock is expected in 2026. They do suggest something more subtle: companies are preparing for low growth, repeated disruption and less forgiving funding conditions. The response is not retreat, but caution. Earlier refinancing, diversified options, stronger hedging, lower acquisition spending and more active debt repayment all point to the same conclusion. Corporate treasury has moved from managing shocks to designing for them. In 2026, resilience is not a contingency plan. It is the strategy.