From the perspective of financing cost, this article investigates the benefits of green bonds to the issuer. Based on 227 green bonds and 405 conventional bonds selected from China’s bond market, we find that (1) green bonds can decrease financing cost by at least 15 bps in the primary market, which is more significant than the effect in the secondary market; (2) third-party certification can strengthen the ‘greenium’ of green bonds in both the primary and secondary markets; and (3) there is no ‘greenium’ effect for financial green bonds in either primary or secondary markets in China, even for green bonds with third-party certification.

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