Do costs of corporate loans rise with sea level?

We examine whether climate-change risk affects firms' cost of capital when firms canadapt to the risk. We find firms' cost of long-term loans increases with sea level rise(SLR) risk, but this effect mainly holds among firms with high adjustment costs to therisk, i.e., firms for whom it is hard to relocate or otherwise diversify SLR risk. Moreover,the spread-risk sensitivity is higher if the bank has more experience with the risk and intimes of heightened media attention. This suggests banks have limited attention to thisunconventional risk