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

Christophe Godlewski

Economic Modelling, 2015, vol. 49, issue C, 19-31

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.

Keywords: renegotiation process; bank loans; multiple failure-time data; Cox model; Europe (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (13)

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Working Paper: The dynamics of bank debt renegotiation in Europe: A survival analysis approach (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:49:y:2015:i:c:p:19-31

DOI: 10.1016/j.econmod.2015.03.017

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