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Do Adverse Oil Price Shocks Change Loan Contract Terms for Energy Firms?

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Abstract

This article examined whether the relationship between creditworthiness and loan spreads for energy firms in the syndicated loan market changed after the 2014 oil-price shock. {{p}} The authors use syndicated loans, which are jointly funded by several financial institutions, because the syndicated loan market is a major source of debt financing for oil firms. Credit conditions tightened following the oil-price shock in mid-2014.

Suggested Citation

  • W. Blake Marsh & David Rodziewicz & Rajdeep Sengupta, 2017. "Do Adverse Oil Price Shocks Change Loan Contract Terms for Energy Firms?," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 59-86.
    • Handle: RePEc:fip:fedker:00057
    DOI: 10.18651/ER/4q17SenguptaMarshRodziewicz
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    File URL: https://www.kansascityfed.org/documents/477/2017-Do%20Adverse%20Oil%20Price%20Shocks%20Change%20Loan%20Contract%20Terms%20for%20Energy%20Firms%3F.pdf
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    References listed on IDEAS

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    1. Christiane Baumeister & Lutz Kilian, 2016. "Forty Years of Oil Price Fluctuations: Why the Price of Oil May Still Surprise Us," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 139-160, Winter.
    2. Amir Sufi, 2007. "Information Asymmetry and Financing Arrangements: Evidence from Syndicated Loans," Journal of Finance, American Finance Association, vol. 62(2), pages 629-668, April.
    3. Dietrich Domanski & Jonathan Kearns & Marco Jacopo Lombardi & Hyun Song Shin, 2015. "Oil and debt," BIS Quarterly Review, Bank for International Settlements, March.
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    Cited by:

    1. Gregory J. Cohen & Jacob Dice & Melanie Friedrichs & Kamran Gupta & William Hayes & Isabel Kitschelt & Seung Jung Lee & W. Blake Marsh & Nathan Mislang & Maya Shaton & Martin Sicilian & Chris Webster, 2021. "The U.S. syndicated loan market: Matching data," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 44(4), pages 695-723, December.
    2. W. Blake Marsh & David Rodziewicz & Rajdeep Sengupta, 2024. "Bank Responses to the 2014 Oil Price Shock," Research Working Paper RWP 24-14, Federal Reserve Bank of Kansas City, revised 12 Aug 2026.
    3. Elie Bouri & Syed Jawad Hussain Shahzad, 2022. "Network Topology of Dynamic Credit Default Swap Curves of Energy Firms and the Role of Oil Shocks," The Energy Journal, , vol. 43(1_suppl), pages 1-26, June.
    4. Francis, Bill B. & Hasan, Iftekhar & Jiang, Chunxia & Sharma, Zenu & Zhu, Yun, 2025. "Climate risks and debt structure," The British Accounting Review, Elsevier, vol. 57(5).
    5. Frédéric Vinas, 2025. "Oil Shocks and their Impact on Corporate Profitability, Productivity, and Credit Risk: Firm-Level Evidence Over Two Decades," Working papers 989, Banque de France.

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