We provide the first firm-level evidence of the relation between state ownership and debt structure. Using an international sample of newly privatized firms (NPFs) from 76 countries over the 1998– 2017 period, we find that state ownership is associated with a more diversified debt structure. This evidence is more pronounced for higher levels of state control, and is robust to accounting for endogeneity, using alternative samples, and controlling for other owner types. Additional analysis shows that our main evidence is consistent with the soft budget constraint, political, and social views of state ownership. Our results have several policy implications for financial system stability and the efficient allocation of financial resources in the economy.