ESG ratings, monetary policy uncertainty, and bond issuance premium.

Existing studies generally recognize the critical role played by macro monetary policy, of which the uncertainty will increase corporate bond issuance premiums at a micro level. However, relatively little is known about these relationships from the perspective of non-financial information in the corporation. So this study sets out to do further exploration. We use the database to obtain information, including the bond issuance of A-share listed corporations in China from 2015 to 2020. The findings suggest that high environmental, social, and governance (ESG) ratings from listed corporations significantly weaken the positive correlation between monetary policy uncertainty and bond issuance premiums. Specifically, it has a positive information pricing effect on China's primary debt issuance market, as well as a mitigating impact on macro-financial policy risk. We also find, through further mechanistic studies, that ESG ratings are more helpful in undermining the impact of monetary policy uncertainty on bond issuance premiums in the context of higher financial information quality. Our findings are conducive to enriching the research framework of the economic consequences of ESG ratings, meaningfully influencing the growing literature that exposed the mechanism of bond issuance premiums, and further, verifying the interaction of information at different levels (macro vs micro) in asset pricing.