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

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  • Christophe J. Godlewski

    (LARGE - Laboratoire de Recherche en Gestion et Economie - UNISTRA - Université de Strasbourg)

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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  • Christophe J. Godlewski, 2015. "The dynamics of bank debt renegotiation in Europe: A survival analysis approach," Post-Print hal-03047777, HAL.
    • Handle: RePEc:hal:journl:hal-03047777
    DOI: 10.1016/j.econmod.2015.03.017
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    4. Godlewski, Christophe J., 2020. "How legal and institutional environments shape the private debt renegotiation process?," Journal of Corporate Finance, Elsevier, vol. 62(C).
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