Climate vulnerability and offshore local-currency corporate bond issuance

This study examines how climate vulnerability affects firms’ issuance of offshore local-currency corporate bonds. Using a sample of listed firms from 32 economies over 2010–2023, we find that higher climate vulnerability significantly reduces such bond issuance. The effect is weaker in economies with lower macroeconomic uncertainty and lower exchange-rate volatility. It is also less pronounced for firms with better credit ratings and lower financial constraints. Mechanism tests suggest that climate vulnerability reduces offshore local-currency bond issuance by increasing country risk and weakening corporate liquidity.