Finance chiefs were preparing for a downturn long before the coronavirus roiled the global economy; however, few expected it to be as swift or severe.

Many resorted to a tested playbook that included tapping additional liquidity, extending debt maturities and identifying areas for potential cost-cutting.

“After 11 years, we were expecting a slowdown or a recession,” said Max Brodén, chief financial officer of

Aflac Inc.,

an insurance company.

Last fall, Columbus, Ga.-based Aflac issued new debt and retired some higher-interest bonds that were set to mature in 2022.

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“We took a number of steps to prepare the company for weaknesses in the economy, even though we certainly did not see this [a global pandemic] coming,” Mr. Brodén said.

Aflac developed a tool kit, which included stress-testing parts of the business to decide how much debt to raise and when, Mr. Brodén said. In March, the company sold about $540 million in yen-denominated debt, followed by a $1 billion bond sale in the U.S. More than 70% of the company’s business is generated in Japan. Aflac won’t need to access capital markets further, according to Mr. Brodén.

Around 50% of CFOs at U.S. companies last year said they expected a recession at some point in 2020, according to the Duke CFO Global Business Outlook, a quarterly survey conducted by Duke University. CFOs’ expectations were a moving target. Each quarter respondents pushed out when they thought a recession would begin, from the second quarter of 2020 to the fourth quarter.

CFOs reacted to the weakening outlook by cutting costs, stockpiling cash, scaling back and delaying investments.

Jaap Tonckens, chief financial officer of Unibail-Rodamco-Westfield SE.


Carla Gottgens/Bloomberg News

A recession is defined as two consecutive quarters of declining performance across an economy. U.S. gross domestic product grew by 2.3% last year, the slowest pace since 2016 but in line with the average speed of the recovery that began in mid-2009. GDP contracted at an annualized rate of 4.8% in the first three months of 2020, and economists expect an even lower reading for the second quarter.

By the end of March, three-quarters of respondents in the Duke survey were less optimistic about the U.S. economy and 56% were less optimistic about the outlook for their own company, compared with the previous quarter.

More executives were being proactive in planning for a recession; however, they weren’t as aggressive in tackling “the extreme downside that we are seeing now,” said John Graham, a professor of finance at Duke University who oversees the survey. “From the second quarter of 2019 onwards, we saw dark clouds on the horizon.”

MSCI Inc.,

the New York-based index provider, in November sold two sets of bonds—each with a volume of $500 million and set to mature in 2029—to add to its liquidity buffer and, in part, to refinance older, more expensive debt.

“We had seen an expansion that had gone on for more than 10 years,” said Linda Huber, the company’s chief financial officer. “Market conditions don’t go on forever.”

MSCI generates about 80% of its revenue from subscriptions—it charges fund managers for the use of its indexes in their portfolios, including the MSCI World stock market index—but nevertheless could face challenges because of the downturn, Ms. Huber said.

The company went to the capital markets again at the end of February to raise additional debt, Ms. Huber said.

Unibail-Rodamco-Westfield SE,

a real-estate company that operates shopping malls in the U.S. and Europe, in recent years took steps to extend its debt maturities, said finance chief Jaap Tonckens. URW currently has over €11.7 billion ($12.7 billion) in cash and undrawn credit lines. “It’s a good thing to have low-cost debt and long maturities,” he said.

All three finance chiefs said the steps they took before the pandemic and up to this point are sufficient for weathering a downturn—even though the depth and the duration of the coronavirus-induced slowdown is difficult to forecast.

“When the sun is shining, you plan and take advantage of that,” Ms. Huber said.

Write to Nina Trentmann at

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