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“I would not want to be negotiating bank credit right now,” observes Greg Weigard, assistant treasurer at $10 billion Air Products & Chemicals Inc. Like other farsighted treasury managers, he made sure he wouldn’t have to. Weigard’s treasury team reevaluated the Allentown, Pa.-based company’s multi-year credit facilities while they still had a couple of years to go and entered renegotiations when the market was favorable. Air Products currently has a five-year syndicated revolver for $1.2 billion with 15 banks that it renegotiated in 2006, so the company is protected until 2011 and none of the credit is drawn. Weigard is fortunate, but hardly alone. The treasury department at Honeywell International Inc. locked in a fairly robust $2.8 billion of bank credit last spring–when credit conditions were favorable–expanding the commitment by $500 million and locking in the deal until 2012. The current credit crunch is “the deepest one I’ve experienced,” says Jim Colby, assistant treasurer at $34 billion Honeywell. “This one has a run-on-the-bank mentality. If your credit quality becomes tainted and you haven’t tied down your financing with long-term committed facilities, you’ll have a tough time raising money today.” At year end, Honeywell carried $7.7 billion of debt on its books, none of it bank debt. The bank facilities just back up its commercial paper programs, he explains.

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