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The dynamics of bank debt renegotiation in Europe: A survival analysis approach

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  • Godlewski, Christophe J.

Abstract

Debt renegotiation matters for the borrower-lender relationship to ensure the credit agreement is regularly amended to include new information. I investigate the determinants of the dynamics of bank loan renegotiations using a sample of 1 600 amendments to private debt contracts in Europe. Employing a stratified Cox-type hazard model, I find that initial loan terms, banking pool features, amendments’ characteristics, and the legal environment significantly influence the duration time between renegotiations. Contract complexity, informational frictions in the borrower-lender relationship, the uncertainty of the economic environment, and the legal protection of creditors play a major role in shaping the dynamics of bank loan renegotiation in Europe.

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  • Godlewski, Christophe J., 2015. "The dynamics of bank debt renegotiation in Europe: A survival analysis approach," Economic Modelling, Elsevier, vol. 49(C), pages 19-31.
    • Handle: RePEc:eee:ecmode:v:49:y:2015:i:c:p:19-31
    DOI: 10.1016/j.econmod.2015.03.017
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    3. Christophe GODLEWSKI, 2018. "The effects of bank loan renegotiation on corporate policies and performance," Working Papers of LaRGE Research Center 2018-01, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
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