Finance Desk

Treasury teams are adapting to ongoing market volatility by treating uncertainty as the norm.

This article appears in the July/August issue of Global Finance Magazine.

Treasury teams now navigate sustained market volatility by treating uncertainty as a core factor in everyday
decision-making, rather than an exception. That’s among the central findings of the latest Herbert Smith Freehills Kramer Corporate Treasury Report, whose survey of finance and treasury professionals found 72% now treat volatility as “business as usual,” up from 41% in 2025.

Strikingly, this finding emerged even before the Middle East conflict threw global markets into turmoil. Follow-up interviews conducted since (between February and March 2026) reflect the impact of the early days of the crisis. Just 8% (down from 17% in 2025) reported a material negative impact from macroeconomic and geopolitical events, while 3% reported a material positive outlook (up slightly from 2% in 2025). As of May 2026, energy prices and U.S. tariff uncertainty—in particular the Supreme Court’s Learning Resources v. Trump ruling — were the chief concerns.

The survey, conducted with the Association of Corporate Treasurers, reveals that 45% of corporates are looking to diversify their debt while 55% are not—reflecting both tighter credit conditions and a search for flexibility. The report’s authors suggest the findings point to the economy being at or near a cyclical trough.

Survey respondents said they expected to increase expenditure in 2026 on debt repayment, returns to shareholders and share buybacks, and to reduce spending on acquisitions and capex — suggesting a consolidation, rather than expansion, mindset.

There was also a notable decline in respondents prioritizing cash management, to 71% in 2026 from 91% in 2025. The focus was instead on managing interest rate volatility, derivatives, supply chain and technology risks.

Stacey Pang, of counsel at HSF Kramer, told Global Finance that cash management is, and always will be, a central focus: “The data may simply show that some treasurers have successfully implemented cash management programs in the last year, and therefore have time to prioritize other projects.”

Looking ahead, Pang anticipates the “promise of AI” and its more meaningful deployment will be a key priority over the next 12 to 24 months — with the caveat that AI “cannot and should not replace the ultimate decision-making role of treasury professionals.”

Deborah Ritchie is a contributing writer based in London.

For these CFOs, summer is where the year is won or lost.

This article appears in the July/August issue of Global Finance Magazine.

Every spring, airlines, cruise lines, travel booking platforms, golf tour operators, race promoters and other seasonal businesses begin trying to answer the question that will define much of their year: How is summer shaping up? For their CFOs, a few months of peak demand often determine whether the entire year meets expectations.

This year, the early signals have been broadly encouraging. Despite conflict in the Middle East that rattled European and Asian bookings, travel advisories in Mexico, and lingering concerns about consumer sentiment, many travel companies reported strong demand. Europe’s TUI Group reported its best-ever first half, with 7.9 million summer bookings already in place, while Expedia posted its highest first-quarter EBITDA margin in 15 years.

But the stakes remain unusually high because many of these businesses generate a disproportionate share of their annual revenue in a relatively short window. Whether they operate airlines, racetracks, or golf tours, their finance chiefs spend months forecasting demand, managing labor and capital, and preparing for risks—from weather disruptions to geopolitical shocks—that could derail the season.

The Aviation CFO: Gauging Bad Weather

Today, by contrast, consumers want to travel, and the booking window is holding steady. That signal is especially important to the CFOs at companies whose fortunes depend on summer travel. 

Max Mertz is CFO and co-owner of Alaska Seaplanes, which operates a fleet of 20 aircraft based in Juneau and serves communities throughout southeast Alaska. Summer brings millions of visitors to the state, many seeking flights over glaciers, bear safaris, and trips to remote fishing lodges. 

“June, July, August, and then, if you add the shoulder season, which starts around mid-May and lasts until about a week after Labor Day, account for two-thirds of our revenue. It’s critical, honestly,” Mertz says.

Bookings at his company’s tourism subsidiary arrive months in advance, enabling year-over-year comparisons. Fishing lodges commit capacity based on their own guest projections. Strong retail sales and corporate bonus cycles in the Lower 48 states translate into lodge demand. Construction projects and gold and silver mines in remote communities create predictable demand for cargo and charters.

The seasonal concentration is all about costs. 

“Aviation is a high fixed-cost industry,” Mertz says. “On a per-flight, per-unit basis, obviously the higher your volume, the more you cover fixed costs, so you’re making a good chunk of your bottom line as well.”

What makes Alaska Seaplanes unusual — even among seasonal businesses — is the extent to which weather inserts an uncontrollable financial variable. Anyone who has flown in Alaska knows how its dense cloud layer and mist can quickly form, grounding aircraft for days. Mertz has invested in reliability. Alaska Seaplanes has spent multiple seven-figure sums on specialized navigation systems that increase aircraft safety and reliability.

No Do-Overs: Running Racetracks

Weather also matters to Mike Morrisey. As CFO of Green Savoree Racing Promotions for the past 31 seasons, he oversees four motorsports race properties: Mid-Ohio; a newly built circuit in Markham, Ontario; St. Petersburg, Florida; and Portland, Oregon. “The summer is where you make your revenue,” he says.

Often, a big race weekend is a single 72-hour window when gate revenue, hospitality, suites, sponsorships, and concessions converge. There is no making it up later. 

“When the checkered flag drops, we have crews out there tearing it all down” at the temporary street racing circuits, Morrisey says. 

The leading indicators he watches for signs of summer success are ticket renewals and suite sales. The next forecasting cycle begins almost immediately after the prior season ends. 

“We typically launch ticket renewals in the fall for the following year,” Morrisey says. “St. Pete tickets go on sale in mid-September, and Mid-Ohio in mid- to late October.” Suite customers are approached for renewal while the race is still being torn down. 

The logistics of motorsports racing would likely surprise CFOs in other industries. Green Savoree owns roughly $4 million in portable grandstands and suite infrastructure. These aluminum structures sit in a St. Petersburg warehouse between events, are loaded onto about 40 trucks after the Florida race, and are shipped to Canada for use in Markham. The company operates with fewer than 50 full-time employees year-round, a number that swells to about 270 during the peak summer season. 

Golf’s Stark Scheduling Problem

Gordon Dalgleish co-founded Perry Golf in 1984 and remains president of the luxury golf travel company he and his brother built around the British Isles. The company is now majority-owned by private equity investors. His seasonal challenge is stark: He sells access to some of the world’s most coveted golf inventory in a region that is closed for business for roughly half the year.

“It is very seasonal, and it doesn’t matter what you do,” says Dalgleish. “You cannot sell golf trips for November. It gets dark and rainy.”

The business operates at near-full capacity during the peak season and near-zero outside it; the peak season runs from late April to early October. St. Andrews, which Dalgleish calls the engine that “drives the bus” for the entire Scottish golf hospitality industry, closes for three weeks in September and early October for the Royal and Ancient Golf Club’s autumn meeting and the Dunhill Links Championship. When St. Andrews closes, the broader market goes quiet. 

Booking lead time has changed dramatically, reshaping Perry Golf’s forecasting model. 

Pre-Covid, Dalgleish saw a fairly predictable 12-month booking cycle. Inquiries would begin in July for the following summer, slow through the holidays, and ramp back up in January and February, giving him a clear picture of the season by late February. Today, he sees inquiries for July 2028 arriving in spring 2026. By this Christmas, he expects to have 40% to 50% of next summer’s bookings in hand. 

One possible driver of this shift is affluent Americans, a key customer segment, who have reoriented their spending toward experiences rather than assets and who plan farther in advance to secure exactly what they want. However, the supply of premium Scottish golf inventory has barely grown. 

“There are 25 courses that are on everyone’s must-play list in Scotland,” Dalgleish notes. Demand is running ahead of last year’s pace, and father-son trips are booking at high volumes. “There’s an affluence slushing around in golf just now.”

The Franchise Model Meets the Heat Wave

Josh Greear models a different kind of seasonal pressure. As CFO of Maryland-based Authority Brands, which derives over 90% of its revenue and more than $2 billion in annual system sales from 15 home services franchise brands, he manages seasonal concentration across a portfolio of businesses, each facing different summer inflection points.

“Summer’s always been important to Authority Brands,” Greear says. Its America’s Swimming Pools franchise business faces heavy warm-weather demand. Consumers tend to seek the services of its Mosquito Squad brand as critters emerge in warm weather. One Hour Heating & Air is driven by heat waves, not the calendar. Figuring out when to hire is tricky.

“The hardest time to manage labor is on the shoulder of the seasons, when you’re seeing the largest change,” Greear observes. In a business like One Hour Heating and Air, if temperatures spike sharply and you’re not prepared, you miss the demand and usually have no easy way to make it up. Conversely, if you’ve overstaffed in anticipation of early summer, profitability erodes.

To better manage risk, Greear says Authority Brands has invested in large-language-model-driven forecasting that integrates local weather trends, historical demand patterns, and brand-specific variables at the ZIP code level. The business now uses multivariate models that ingest large datasets and distill them into actionable insights for specific locations. For summer 2026, Greear flagged a milder-than-typical start to the season in many parts of the US, which will affect the timing of demand for weather-sensitive brands.

Greear measures success by revenue, share gains, and franchisee health: “If we’re taking share, our customers are happy, and, most importantly, our franchise owners are healthy, then our business is in a very stable, long-term strong position.”

Another way to manage seasonal risk, however, is to diversify: in this case, by owning businesses that operate year-round, collectively if not individually.

California-based Youth Enrichment Brands traces its roots to summer camp and has spread that model across 12 months; its portfolio now includes US Sports Camps, i9 Sports, and School of Rock, which together smooth the seasonal curve. 

“As of 2025, less than 20% of our systemwide sales are derived from summer-based activities alone,” says Dustin Bertram, CFO. Winter programs, year-round leagues, and music instruction have broadened the revenue base. “The platforms that win will be those that remain focused on the customer experience, maintain diversified offerings, exercise disciplined cost control, and invest in evolving their programs.”

Weld Royal is a contributing writer based in the U.S.

Liquidity relief today, balance-sheet strain tomorrow: The very structures that make private credit nimble—PIK loans—could also mask risk until it’s too late.

When GoHealth Inc. filed for Chapter 11 bankruptcy protection on June 7, the writing had been on the wall for two years. The Chicago-based health insurance marketplace had inked a payment-in-kind (PIK) deal to preserve liquidity only to collapse under the weight of more than $1 billion in debt.

For GoHealth’s lenders, including Blue Owl Capital, one of the largest private credit managers, it was a familiar scenario — allow a portfolio company to defer cash interest payments and roll them into its debt balance. This preserves liquidity during uncertain times. For GoHealth, the PIK agreement preceded a critical Medicare enrollment cycle.

Ultimately, it only bought time.

Liquidity deteriorated, Medicare Advantage pressures persisted, and GoHealth—once valued at $6.6 billion—ran out of runway. By late last year, lenders had placed the company’s loans on nonaccrual status. By the time GoHealth filed for bankruptcy protection, the PIK arrangement had become just another case study in a growing private-credit risk: debt structures that postpone distress while quietly deepening it.

“PIK is like a double-edged sword,” said Lakshmi Ganapathi, founder of Unicus Research in Ridgefield, Connecticut. “Borrowers seem to love PIK toggles in good times because it preserves the cash, but under stress, the accruing principal at a compounding rate becomes a balance-sheet problem. It’s attractive until it’s not.”

GoHealth and Blue Owl did not respond to requests for comment.

Borrower, Beware

GoHealth is hardly alone. P3 Health Partners restructured its term loan last year into a cash-and-PIK arrangement, requiring borrowers to pay a portion of interest in cash while adding the remainder to principal. This preserved liquidity but increased leverage over time. The Henderson, Nevada-based healthcare provider now has $380 million in long-term debt at double-digit interest rates.

In some cases, the outcome is more dramatic. Software company Pluralsight, owned by Vista Equity Partners, was ultimately handed over to a consortium of private credit lenders, including Blue Owl, Ares, Golub, Oaktree, Goldman Sachs, and BlackRock. Efforts to manage Pluralsight’s debt burden proved insufficient, and Vista wrote off roughly $4 billion in equity.

“There’s a through-line across all of them,” Ganapathi told Global Finance. “A borrower under cash-flow strain defers an obligation, whether through PIK, an amendment, or a liability-management exercise.”

The deferral increases the debt burden or postpones the reckoning, and the resolution is a lender-led restructuring in which the equity is wiped out or impaired and the debt holders take control.

“The 2026 cluster is concentrated in healthcare and software, where higher-for-longer rates met business models underwritten on cheaper money,” she added.

In a post-bank-crisis world of high interest rates and tightened underwriting standards, private credit has stepped into the void. But the very perks that make it nimble — like PIK loans — can be foreshadowing: a bankruptcy filing that simply formalizes what the PIK plan already implied.

Firms like Blue Owl Capital have exposure across a range of heavily leveraged software, technology, and financial borrowers, some of which have recently faced bankruptcies, insolvencies, or out-of-court restructurings. It’s enough to turn certain dealmakers off completely.

“Our firm doesn’t do any pay-in-kind,” Scott Stevens, CEO of Grays Peak Capital, a New York-based global investment firm, said. “We only do cash pay, and that is, I think, why we’ve had no defaults.”

One need only look to the September bankruptcy of auto parts supplier First Brands Group. The filing came after a PIK-based option had been introduced — highlighting how quickly deferred-interest arrangements can become embedded in stressed credits. Fortified by the “cockroach” imagery used by JPMorgan Chase CEO Jamie Dimon, headlines about the collapse of private credit began circulating.

But the evidence isn’t just anecdotal.

Poorly PIK-ed

An analysis by Lincoln International found that 11% of loans in its private credit database carried some form of PIK interest in 2025, up from 7% in 2021. While the increase appears gradual, the composition of these loans is what’s striking: 58% are now classified as “bad PIK.”

That means the borrowers couldn’t keep up with payments and later had to switch to PIK. The shift matters because it reflects weakening credit quality rather than a pre-planned financing option.

In other words, the loans migrated into PIK status as borrowers faced deteriorating cash flows and required relief. The share of “bad PIK” loans has more than doubled since late 2021, Lincoln notes, effectively turning the metric into a proxy for underlying problems.

The implications are significant. In many cases, borrowers use PIK not because business conditions are improving or because growth is being reinvested, but because cash generation is insufficient to service debt. Lincoln describes this as a potential “shadow default rate,” capturing companies that might otherwise have defaulted absent lender forbearance.

The deterioration in the balance sheet is equally stark. Within the bad PIK group, average loan-to-value ratios have risen from 39.4% at origination to 76.1% today, underscoring how quickly leverage can escalate when earnings weaken and enterprise values compress.

Private credit proponents highlight flexibility and speed as advantages that outweigh the drawbacks. Unlike traditional banks, direct lenders can close deals in weeks, tailor covenants, and even hold entire loan books. Borrowers pay a premium for certainty and confidentiality: a trade-off that often, though not always, takes the form of a PIK arrangement. But Grays Peak Capital’s Stevens sees 2026 as an inflection point.

“A lot of people tightened their lending standards over the last three to six months,” he says. Stevens attributes the stress to a combination of rate resets and companies failing to grow in line with underwriting assumptions. Some defaults are to be expected, especially those that are tech and venture related. “But I don’t think it’s systemic in terms of the economy.”

A Bank-Like Game, Sans the Rules

Not everyone is so optimistic. After all, the sector’s flexibility comes with a cost: opacity. Critics point to the tangled web of interconnections between private lenders and banks as a source of potential systemic risk.

The very features that make private credit attractive — speed, flexibility, confidentiality — also make it difficult to monitor. And as PIK loans accumulate on balance sheets with limited public disclosure, a broader question is taking shape. If private credit is playing a bank-like game, should it play by the same rules?

Regulating private credit providers like banks would be too stifling, Stevens argues. “If they would go too far down the regulatory path, I think this will skirt innovation and growth,” he said, pointing to defense sector financing as an area where private credit needs room to maneuver.

Todd Holleman, a partner at King & Spalding, draws a distinction between the two. Bank regulations exist for a reason, he argued. Deposits are primarily individuals’ money, and the global financial crisis showed how quickly bad investments could put that money at risk. Private credit is different. Its capital comes primarily from sovereign wealth funds, pension plans and insurance companies — sophisticated investors who are already regulated and understand what they’re buying. Applying bank regulations to private credit, Holleman said, would be an apples-to-oranges comparison. “They just wouldn’t work.”

Ganapathi sees it differently, citing the case of Market Financial Solutions (MFS). The UK bridge lender collapsed into administration in February following allegations of fraud and asset double-pledging. HSBC wasn’t directly exposed to MFS — it was exposed to Apollo, which was. The $400 million loss traveled up the chain.

“It cascades,” Ganapathi said, drawing a parallel to Japan’s lost decade, when banks extended credit to insolvent borrowers while avoiding mark-to-market accounting — papering over losses until the system buckled. “They were extending and pretending like nothing happened, not marking to market. That derailed the system. Regulations stopped it. Now, if you take regulation out of the picture, what will stop this? Without a trigger, this could continue for a long time.”

Anthony Noto covers corporate finance and private credit. Contact him at anoto@gfmag.com.