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

Author

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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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Suggested Citation

  • 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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    Cited by:

    1. Zhou, Fanyin & Fu, Lijun & Li, Zhiyong & Xu, Jiawei, 2022. "The recurrence of financial distress: A survival analysis," International Journal of Forecasting, Elsevier, vol. 38(3), pages 1100-1115.
    2. 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.
    3. Godlewski, Christophe J., 2020. "How legal and institutional environments shape the private debt renegotiation process?," Journal of Corporate Finance, Elsevier, vol. 62(C).
    4. Christophe J. GODLEWSKI, 2017. "Initial conditions and the private debt renegotiation process," Working Papers of LaRGE Research Center 2017-03, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    5. Diego Vallarino, 2023. "Machine Learning Survival Models restrictions: the case of startups time to failed with collinearity-related issues," Journal of Economic Statistics, Anser Press, vol. 1(3), pages 1-15, December.
    6. Allaya, Manel & Derouiche, Imen & Muessig, Anke, 2022. "Voluntary disclosure, ownership structure, and corporate debt maturity: A study of French listed firms," International Review of Financial Analysis, Elsevier, vol. 81(C).
    7. Eça, João Paulo Augusto & Albanez, Tatiana & Schiozer, Rafael Felipe & do Valle, Mauricio Ribeiro, 2024. "The determinants of debt renegotiation: Evidence from Brazil," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 244-255.
    8. José Valente & Mário Augusto & José Murteira, 2022. "Bargaining power and renegotiation of small private debt contracts," Annals of Finance, Springer, vol. 18(4), pages 485-510, December.
    9. Christophe J. Godlewski, 2019. "Debt Renegotiation and the Design of Financial Contracts," Journal of Financial Services Research, Springer;Western Finance Association, vol. 55(2), pages 191-215, June.
    10. Diego Vallarino, 2024. "A Comparative Machine Learning Survival Models Analysis for Predicting Time to Bank Failure in the US (2001-2023)," Journal of Economic Analysis, Anser Press, vol. 3(1), pages 129-144, March.
    11. Won Sang Lee & So Young Sohn, 2017. "Identifying Emerging Trends of Financial Business Method Patents," Sustainability, MDPI, vol. 9(9), pages 1-21, September.

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