Exploiting hand-collected CEO contract data from SEC filings (1994-2018), we find that newly appointed CEOs with longer initial contract periods are associated with significantly higher bank loan costs. We demonstrate this positive relationship is causal by utilizing a quasi-natural experiment that exogenously reduces CEO contract duration. The additional tests provide evidence that both default and information risks are two key mechanisms that explain the above relationship and underlie our hypotheses. Our findings also indicate that CEOs with lengthier contract horizons are met with stricter nonprice loan terms. Additionally, we reveal that when CEOs have lengthier initial contract horizons, fewer lenders are willing to form the lending group in a loan facility, which supports the monitoring incentive for syndication. Finally, our findings, from the perspective of public bondholders, suggest that new CEOs with longer contract horizons incur higher at-issue bond spreads. We conclude that both private and public lenders perceive heightened risks with CEOs serving longer initial contracts, and therefore, adjust the terms of the debt to compensate for the risk of lending.