Debt renegotiation and the design of financial contracts

Christophe Godlewski

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: I study the impact of bank loan renegotiation on the design of financial contracts. Debt renegotiation can be beneficial for borrowers and lenders but its impact on the design of financial contracts is less clear. However, contract design is crucial for borrower’s investment, operating and financing policies. I find that the design of renegotiated credit agreements is not homogenous. Main renegotiation packages contain amendments to loan amount and maturity. I show that secured loans with longer maturities experience broader amendments. Creditors’ friendly environment and the presence of reputable, sound, and profitable lenders have a similar effect.

Keywords: financial contracts design; bank loans; debt renegotiation. (search for similar items in EconPapers)
JEL-codes: G10 G21 G24 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-cta
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ifs.u-strasbg.fr/large/publications/2016/2016-03.pdf (application/pdf)

Related works:
Journal Article: Debt Renegotiation and the Design of Financial Contracts (2019)
Working Paper: Debt Renegotiation and the Design of Financial Contracts (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2016-03

Access Statistics for this paper

More papers in Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg Contact information at EDIRC.
Bibliographic data for series maintained by Christophe J. Godlewski ().