The Impact of Greenium on Stock Price Reactions to First-Time U.S. Corporate Green Bond Announcements

This study investigates whether the magnitude of "greenium", the yield discount on green bonds relative to comparable conventional bonds, impacts stock price reactions following first-time U.S. corporate green bond announcements. While the existence of greenium has been well-documented in bond markets, its influence on equity markets remains unclear. Using a dataset of 60 first-time U.S. corporate green bond issuers between 2015 and 2024, I conducted an event study to measure cumulative abnormal returns (CARs) around green bond announcements, and cross-sectional regressions to test the relationship between greenium and CARs.