Swiss franc bonds are frequenting treasurers’ minds again as windows for arbitrage funding return to the market. For three years, Swiss market participants have gritted their teeth as cross-currency basis swaps and attractive funding conditions in core markets squeezed supply from abroad. But this seems to be changing. Four foreign borrowers raised benchmark bonds this week, and bankers expect many more to follow before the summer lull. Silas Brown reports.
The Swiss franc bond market lost three quarters of foreign issuance over the course of the last decade — plummeting from over Sfr60bn ($60bn) in 2009 to roughly Sfr15bn in 2017, according to Dealogic.
A potent blend of unpleasant basis swap levels for borrowers, negative interest rates for