Economics in a picture
Firms with lower risk are financed with lower interest rates
Interest rates on new corporate loans stabilized in 2018, after a downward trend in previous years. This is true for both low-risk and high-risk firms. As a result, the average interest rates on new loans granted to higher risk companies remain higher than those applied to lower risk companies.
The interest rate differential between the different levels of risk does not show significant deviations over the period under analysis. This evolution reflects the behavior of the interest rate on loans with maturity lower than one year.
For more details see Box 2: “Interest rates on new loans to enterprises, by risk profile”, published in the Economic Bulletin of Banco de Portugal, May 2019.
Prepared by António Santos. The analyses, opinions and findings expressed above represent the views of the author and not necessarily those of Banco de Portugal or the Eurosystem.
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