Did the capital structure of firms listed on Oslo Stock Exchange change in the period 2004-2013?

Abstract

After the financial crisis in 2008, the financial landscape has undergone changes. This has affected firms' access to capital. It has become harder to obtain traditional bank loans, because of new regulations and restrictions on banks and financial institutions. At the same time, the Norwegian bond market has experienced a significant growth. This paper examines the development in capital structure and the composition of debt for firms listed on Oslo Stock Exchange. Listed firms had a stable growth in debt for the years 2004-2013. The average debt ratio for OSE-listed firms experienced a jump under the financial crisis. This was due to a large fall in market value of equity. Almost the entire jump in debt ratio can be explained by the fall in share price. There has been a substantial increase in firms' use of bonds after the financial crisis. When one firm is extensively analysed as an example, we find that the use of bonds has increased more than bank loans after the crisis. This indicates that bonds account for an increasing share of total debt.