Companies Preparing for ‘Unthinkable’ U.S. Downgrade, Default

Corporate treasurers are preparing for a downgrade of and potential default on U.S. Treasuries by shortening the average maturity of their holdings and moving more money into insured bank accounts and money-market mutual funds.

While companies aren’t selling Treasuries, they are reinvesting cash from maturing securities in the shortest available instruments, consulting firm Treasury Strategies Inc. said in an e-mailed statement today, citing discussions with clients.