Corporate Debt and Treasury Report 2024

Executive summary

Corporate treasury has been, continues to be and must remain, agile in responding to unpredictable macroeconomic and political events. This applies both to debt raising (and being ready to access markets at optimal times) but also in a wider treasury context, supporting their businesses across all treasury activities and markets.

Whilst there is a sense of greater certainty of access to capital and fewer concerns of lack of access to debt as well as a perceived lower risk of financial distress, business investment (both through capital expenditure and M&A) is muted. Corporates are holding on to more cash as a buffer for the next unexpected economic shock or, potentially, with a view to cash funded M&A as conditions for investment improve.

Banks remain the mainstay corporate debt providers having a number of advantages over non-bank lenders when lending to corporates. That is likely to remain the case though there is some caution that banks are becoming more selective in making capital available. 'Cash is king' and preserving it is a key focus. There is less focus on minimising gross debt and more focus on keeping funds for the next opportunity or economic shock.

There is greater evidence of a bifurcation of approaches on ESG in debt finance, in particular for sustainability linked loans. Whilst those who have sustainability linked finance in place look likely to continue to do so, for others it has fallen considerably down the treasury agenda. For many, the benefit of establishing an SLL does not justify the time and cost of doing so nor does it meaningfully move forwards a corporate's ESG agenda. Some respondents query whether SLLs have had their day as a company's ESG strategy becomes part of a lender's binary lending decision rather than a minor margin adjustment.

About our research and report

This research comprises a survey of, and follow-up interviews with, finance and treasury professionals at 65 UK corporates (primarily FTSE 100, FTSE 250 and equivalents) conducted in January to March 2024.

We hope you find these findings informative and we would like to thank those who participated in our research. In particular, we are grateful to those who took part in our follow-up interviews to discuss the survey results. Their views added depth to the research findings and their input has been invaluable. Thank you.

lf you have any feedback on the research or its results, we would be very happy to receive it. We would also be delighted to hear from you if you are happy to take part in our research next year as we aim to make this report as useful to the treasury community as possible.

Some of the themes explored in this report are necessarily only addressed in headline terms. Over the course of the rest of the year, we will issue short form, practical insights on some of these issues and share views from other treasury professionals. If you would like to receive those please email Rowena.Paskell@hsf.com.