Investor Preference, Interest Rate Discount and Pricing of Green Bond Issuance

Abstract

This paper firstly introduces investors' green preference into the theoretical analysis framework of investment portfolio, and uses the methods of comparison and selection to show that there is a premium on green bond issuance (about -14.5 basis points) in China, and further tests the joint effect of bond factors and green factors on the interest rate discount of green bond issuance. The research results show that the premium of green bonds of state-owned enterprises is higher than that of private enterprises, and the premium of green bonds issued by financial enterprises is higher than others. The positive effect of certification on Greenium and insignificant preference emphasizes the low maturity of domestic green bonds markets at this stage. Therefore, it is time to steadily promote policy coordination, vigorously support the issuance of green bonds by non-state-owned enterprises, and promote the development of green bond certification institutions in the direction of specialization. Finally, it is expected to release the demand of green investors and further accelerate the sustainable development of green bond market.