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Motivation: Incumbent literature focuses on motivation, post-initial public offering (IPO) stock performance, and post-IPO operation performance. Few investigate how successful IPOs impact industry peers' performance. This paper is the first to study the competitive effects of IPOs on industry peers' bank loan terms. Premise: Our paper investigates how a successful IPO impacts the incumbent companies' bank loan terms, including price and non-price terms. We assume that the successful IPO will affect industry peers' bank loans via escalated product market competition and financing market competition. Approach: We select the largest IPO event in the surrounding six years in the industry to avoid contamination from other IPOs. We implement ordinary least squares (OLS) regressions on 13,075 facility-firm loan observations from 1989 to 2011. To alleviate endogenous concerns, we use difference-in-difference methodology to prove the causality between IPO competitive effects and industry peers' bank loan terms. Results: We find that after the successful IPO, bank loans initiated for the industry's incumbent firms have significantly higher loan spread, higher likelihood of employing performance pricing provisions, and higher commitment fees. We also find that the syndicate loan structure for industry incumbents becomes more concentrated after successful IPOs in the industry: the number of lenders declines while lead bank share increases. We further show that successful IPOs' competitive effects increase as the level of industrial product competition and financing competition increase. Conclusion: Successful IPOs impact peers' bank loan terms, including price and non-price terms. The IPO competitive effects are more pronounced among firms in more intensive industrial competition and with higher levels of information asymmetry. It implies that IPO competitive effects impact the peers' bank loan terms via product market competition and financing market competition. Consistency: This paper shows that the new player in the market has a competitive advantage over incumbent firms. This finding has important implications to investors and creditors since incumbent firms comprise the majority part of capital market. Keywords: bank loan contracts, competitive effect, financing market competition, initial public offering (IPO), product market competition JEL Classification Codes: G14, G21, G32, INTRODUCTION Extensive literature analyzes companies that go public. This strand of research focuses on the incentives of companies to go public, stock performance, and operation performance around initial public offerings [...]