"We argue that a firm's aggregate risk is a key determinant of whether it manages its future liquidity needs through …, firms with high aggregate risk find it costly to get credit lines from banks and opt for cash reserves in spite of higher … robust to variation in the proxies for firms' exposure to aggregate risk and availability of credit lines; works at the firm …

reserves are positively related to credit risk, resulting in a positive correlation between cash and spreads. In contrast …, spreads are negatively related to the "exogenous'' component of cash holdings that is independent of credit risk factors …, suggesting that precautionary savings are central to understanding the effects of cash on credit risk"--National Bureau of …