Non-financial companies that are rated by Standard & Poor's have added to holdings in cash and short-term investments, though most of the assets were highly concentrated among the highest-rated firms, including technology and healthcare companies.
These companies also hold most of their cash and short-term investments overseas, in order to avoid taxes as high as 35 percent that they would be required to pay if the funds were repatriated to the United States, Standard & Poor's said.
Cash and short-term investments of the companies that S&P rates have increased 41 percent since 2006, even as the companies' debt also rose. This shows a desire to preserve high cash loads or keep the cash overseas rather than pay down debt, the rating agency said.
Demand for a dwindling supply of high-grade debt by investors, including companies, has helped push US Treasury bill yields to negligible levels, and pushed short-term debt yields on the bonds of some European countries, including Switzerland and Denmark, into negative territory.
One-month Treasury bills yielded around 7 basis points on Monday, while three-month bills yielded 10 basis points.
Of the top 10 companies that hold the most cash, only Microsoft Corp, Google Inc, Cisco, Oracle Corp and Amgen Inc break out the regions where they hold the assets.
At the end of 2011, Microsoft held 89 percent of its $51.74 billion in cash and short-term debt overseas, Google held 48 percent of $44.63 billion overseas, Cisco held 91 percent of $44.39 billion overseas, Oracle held 75 percent of $31.01 billion overseas, and Amgen held 82 percent of $20.64 billion overseas.
Speculative-grade companies, which are those rated B or below, five steps below investment grade, hold only 10 percent of the overall cash and short-term investments in Standard & Poor's study. These companies are more vulnerable to losing access to credit if the economy and eurozone crisis continue to deteriorate, S&P said.