Journal of Financial Services Research

, Volume 55, Issue 2–3, pp 191–215 | Cite as

Debt Renegotiation and the Design of Financial Contracts

  • Christophe J. GodlewskiEmail author


This study examines the design of financial contracts after renegotiations. It focuses on the degree of renegotiation as measured by the number of amendments to the contract. I find that the design of renegotiated financial contracts is not homogenous, although the most frequent amendments are to the loan’s amount and maturity. I show that the number of amendments increases with longer maturities. Collateral and bank reputation have the opposite effect. Creditors friendly environments with fewer renegotiation frictions increase the number of amendments. Overall, contractual, organizational, and legal features have a significant influence on the design of financial contracts after renegotiation.


Financial contracts design Bank loans Debt renegotiation 

JEL Classification

G10 G21 G24 



I am very grateful to the editors (Edward Prescott and Haluk Ünal) and an anonymous referee for very valuable comments, remarks, and suggestions. I am also grateful to Jocelyn Martel and Bill Francis for helpful comments as well as to participants at the AFFI 2016 (Liège) and FEBS 2016 (Malaga) Conferences for insightful discussions. The usual disclaimer applies.

This work has benefited from support by the initiative of excellence IDEX-Unistra (ANR-10-IDEX-0002-02) from the French national program “Investments for the future”.

Supplementary material

10693_2019_311_MOESM1_ESM.docx (29 kb)
ESM 1 (DOCX 29.3 kb)


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Faculty of Law & Business & EM Strasbourg Business SchoolUniversity of StrasbourgStrasbourgFrance

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