The correct answer is: Risk of a deteriorating credit rating.

A risk of deterioration in the company's credit rating brings the prospect that the company may be unable to renew its borrowing facilities, and so long-term loans arranged now may be preferred.

Exposure to interest rate movements will make treasury managers seek a balance between long-term and short-term borrowings in their debt portfolios.

Inaccurate cash flow forecasts, possibly leading to excessive cash holdings but 'locked-in' long-term debt, or a short-term cash deficit, are likely to increase reliance on short-term borrowings.

Exposure to exchange rate risk will not, in itself, affect the preference for long-term debt over short-term debt.