Loans on sale: Credit market seasonality, borrower need, and lender rents

NBER Working Paper No. 20310

Issued in July 2014, Revised in December 2015

NBER Program(s):Corporate Finance, Industrial Organization



The market for corporate credit is characterized by significant seasonal variation, both in interest rates and the volume of new lending. Firms borrowing from banks during seasonal "sales" in late spring and fall issue at 19 basis points cheaper than winter and summer borrowers. Issuers during cheap seasons appear to have less immediate or uncertain needs, but are enticed by low rates to engage in precautionary borrowing. High interest rate periods capture borrowers with unanticipated, non-deferrable investment needs. Consistent with models of intertemporal price discrimination, seasonality is strongly associated with market concentration among a few large banks with repeated interactions.

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Document Object Identifier (DOI): 10.3386/w20310

Published: Justin Murfin & Mitchell Petersen, 2016. "Loans on sale: Credit market seasonality, borrower need, and lender rents," Journal of Financial Economics, . citation courtesy of

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