This study examines the relation among chairman interlocking, debt financing, and cost of debt by using a sample of Taiwanese firms. We find that firms with chairman interlocking tend to have greater bond leverage. The loan component analysis further shows that constrained firms with chairman interlocking have greater public debt and non-bank private loan leverage, and a lower cost of debt, than those without chairman interlocking, The findings provide new insights into board characteristics and show that chairman interlocking helps constrained firms shape their optimal capital structure. This advantage might counteract the agency cost incurred by the chairman's outside appointments.