Work

Private debt versus bank debt in corporate borrowing

Year: 2026

Type: article

Abstract: Using administrative bank loan-level data matched to private debt deals, we study the interaction between private and bank debt for a large segment of dual borrowers. These firms use private debt for investment and bank credit lines for liquidity insurance. Private debt carries higher spreads and commonly features flexible, equity-like terms that are associated with greater reliance on bank credit lines. Relative to bank-only borrowers, dual borrowers obtain more and larger credit lines and draw them more intensively following liquidity shocks. Our findings suggest that private debt substitutes for bank term loans but complements banks’ provision of liquidity through credit lines.

Source: Journal of Financial Economics

DOI: 10.1016/j.jfineco.2026.104401

Authors: Sharjil Haque, Simon Mayer, Irina Stefanescu

Institutions: Federal Reserve Board of Governors, Carnegie Mellon University

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,740

OpenAlex ID: W4396783689

FWCI: 3.71

Cites: 69

Cited by: 12

Related to: 10