We investigate the impact of the geographic proximity of underwriters on bond characteristics by using corporate and enterprise bonds issued in China from 2009 to 2019. We find bonds underwritten by underwriters in close geographic proximity are associated with lower financing costs, longer maturity in high and medium credit rating firms, shorter maturity in low credit rating firms, and lower default risk. Further, we find substitution effects between the geographic proximity of underwriter and underwriter reputation, and also between the geographic proximity of underwriter and firm transparency on reducing the costs of bond financing; i.e., a better reputation of the underwriter or higher transparency of the firm will weaken geographical proximate underwriters’ effects. Our results are robust in subsamples when firms have different degrees of local government connections.