n Review of Development Finance - Impact of credit quality on credit spread of Green Bonds : a global evidence

Abstract

This study investigates the effect of credit quality on the credit spread of green bonds (GB). GB issues in 2016 and 2017 are considered for the study along with comparable conventional bonds (CB). The sample is categorised into two panels, investment-grade and non-investment-grade, to examine the effect of credit quality on the credit spread of GBs. Analysing a large sample of daily data, the study concludes that GBs are issued at a premium in the market only if the particular bond issue is an investment-grade one. This study uses hybrid method in panel regression analysis to reach the aforesaid conclusion.