The financial meltdown in the fall of 2008 prompted many largecompanies to prep for future calamities, but recent events arepushing them to accelerate the implementation of those defensivemoves.

Corporate giants including Coca-Cola, Hyatt Corp., Kinder Morganand J.P. Morgan have issued upwards of $5 billion in long-term debtover the last week, notes Robert Kramer, vice president of workingcapital solutions at PrimeRevenue, an Atlanta-based supply chainfinance provider.

Market volatility—rather than last week's downgrade of U.S.debt—is “pushing treasury departments into very defensive cashpositions, so they're issuing longer-term debt and piling cash onthe balance sheet,” Kramer says.

In fact, FMC Corp. pushed to renegotiate its main $1.5 billioncredit agreement ahead of schedule, closing it Fridaymorning—before the credit downgrade and Monday's market volatility.“I'm very glad to have that process completed,” says Tom Deas, thechemical company's treasurer. “I wouldn't want to be doing a banksyndication this week.”

In addition to the volatility, anemic economic growth appears tobe here to stay, a prospect the Federal Reserve acknowledgedTuesday when it said it would keep its key interest rate near zerountil mid-2013. “That indicates the Fed expects economic growth tobe very slow,” Kramer says.

Companies have been stockpiling cash ever since the creditcrisis in 2008, as well as working to strengthen their balancesheets in other ways that recent events have accelerated.

Amol Dhargalkar, director of risk management advisory atChatham Financial, says prior to Standard & Poor's downgrade ofU.S. long-term debt last week, there was concern that a governmentdefault would hike rates, prompting some companies to put oninterest-rate hedges.

However, the recent volatility in rates—for example, five-yearswap rates dropped 15 basis points last Thursday, rose by the sameamount Friday, then fell 10 basis points Monday—has prompted mostcompanies to take a wait-and-see approach on the interest-ratefront, Dhargalkar says.

“We haven't seen anybody actually getting out of Treasuries,” henotes.

The price of oil has plummeted since last spring, as have theprices of many other commodities, prompting companies to lock inprices using swaps and other derivatives. “We're seeing somecompanies that had risk on the commodities side going into themarket, not so much over the last day or two days but over the lastfew weeks,” Dhargalkar says.

Craig Jeffery, managing partner at Atlanta consultancy StrategicTreasurer, says companies have been analyzing their risk exposuresever since 2008, whether it regards specific countries, industriesor financial counterparties, to determine which require more orless attention. “People are doing more modeling of scenarios withinterest-rate, commodity or currency risk, and what happens if aproblem arises with several of large customers or counterparties,”Jeffery says, adding that some companies are moving such effortsback to the “front burner” after recent events.

Dhargalkar said Chatham has worked with several companiesrecently that are seeking to diversify the counterparties in theirinterest-rate hedging programs. Normally, they would haveinstituted programs on a more concentrated basis, he says. “But now, even at a marginal cost to themselves, they want todiversify their counterparty risk. So a company that might haveconcentrated its risk with one bank is now using two or three.”

Lance Pan, director of investment research and strategy atCapital Advisors Group, says the precarious situation of Italy,Europe's third-largest economy, is a much bigger concern forcorporate finance departments than S&P's new AA+ rating onTreasury bonds. Even if companies don't hold Italian sovereigndebt, any European banks they use as lenders or derivativescounterparties probably do. A precipitous drop in the value ofthose bonds could eat into banks' regulatory capital, potentiallyinhibiting their lending and increasing their risk ascounterparties.

“One thing we noticed was that European banks [in thesyndication] seemed to be under a lot of stress,” says FMC's Deas,adding that when the company renegotiated its credit facility, italso renegotiated bilateral foreign exchange lines with the banksin its syndicate to ensure enough capacity to deal with increasedcurrency volatility.