Empirical Analysis of Corporate Credit Lines

35 Pages Posted: 2 Oct 2008

See all articles by Gabriel Jiménez

Gabriel Jiménez

Banco de España

Jose A. Lopez

Federal Reserve Bank of San Francisco

Jesus Saurina Salas

Banco de España

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Date Written: October 2, 2008

Abstract

Since bank credit lines are a major source of corporate funding, we examine the determinants of credit line usage with a comprehensive database of Spanish corporate credit lines. A line's default status is a key factor driving its usage, which increases as a firm's financial condition worsens. Line usage decreases by roughly 10% for each year of its life. Lender characteristics, such as the number and length of a firm's banking relationships, are found to affect a firm's usage decisions, and credit line usage is found to be inversely related to macroeconomic conditions.

Keywords: credit lines, firm default, bank lending, exposure at default

JEL Classification: E32, G18, M21

Suggested Citation

Jimenez, Gabriel and Lopez, Jose Antonio and Saurina Salas, Jesus, Empirical Analysis of Corporate Credit Lines (October 2, 2008). Banco de Espana Working Paper No. 0821. Available at SSRN: https://ssrn.com/abstract=1277144 or http://dx.doi.org/10.2139/ssrn.1277144

Gabriel Jimenez (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Jose Antonio Lopez

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States
415-977-3894 (Phone)
415-974-2168 (Fax)

Jesus Saurina Salas

Banco de España ( email )

Madrid 28014
Spain

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