What does green bond prospectus communicate about credit spread?

IF 7.4 2区经济学 Q1 BUSINESS, FINANCE

Finance Research Letters Pub Date : 2025-03-22 DOI:10.1016/j.frl.2025.107267

Shivani Sharma, Udayan Sharma

引用次数: 0

Abstract

This study examines how textual disclosures in green bond prospectus affect the credit spread of green bonds. We use data on green bonds issued between September 2014 and December 2024 in the U.S., aligned or certified with the Climate Bonds Initiative (CBI). Results show that investors demand higher credit spread for prospectus with lower readability. The use of green terms in prospectus lowers credit spread. Similarly, positive tone reduces credit spread. These findings remain robust after addressing potential endogeneity concerns. Heterogeneity analysis reveals that the negative effect of green terms on credit spread is more pronounced for firms with poor Environmental, Social, and Governance (ESG) scores.

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来源期刊

Finance Research Letters BUSINESS, FINANCE-

CiteScore

11.10

自引率

14.40%

发文量

863

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