Swiss Francs

It has been a good week for Latin American issuers in Swissies, with two banks from the region taking Sfr400m ($398m) out of the market on Tuesday and Wednesday, bringing total issuance from the region for the year up to Sfr875m.

Two emerging market borrowers familiar to investors returned to the Swiss franc market this week, injecting some geographical diversity into the sector.

The virtual drought in international corporate issuance in the Swiss franc market belatedly came to an end on Tuesday in spectacular fashion, when BMW launched a speedily executed two-tranche issue for Sfr600m ($600m).

The past week has been the busiest of the year so far in the international segment of the Swiss franc market, with European bank issuers accounting for much of the new issue flow.

The international capital market welcomed a new supranational borrower on Monday when Bolivia-based Fonplata issued a debut Sfr150m five year bond via Credit Suisse and UBS.

Robert Horat, managing director of the Zurich-based Pfandbriefbank schweizerischer Hypothekarinstitute, says he is mystified as to why the pooling model underpinning Swiss Pfandbriefe has not been used as a blueprint for covered bond markets elsewhere in Europe.

Korea Western Power (Kowepo) chose an appropriate week to launch the first ever green bond in Swiss francs from an emerging market issuer – and not just because sustainability was high on the agenda at Davos. The deal also came in a week in which representatives from the IFC and the Swiss Secretariat for Economic Affairs (SECO) met in Bern to discuss the results of a consultation on impact investing among more than 100 members of the Association of Swiss Sustainable Finance (SSF).

Given the uncertainty created by Tuesday’s Brexit vote, the issuance frontloaded into the Swiss franc market at the start of the week was dominated by domestic borrowers.

Zurich-based syndicate heads entered the new year cautiously optimistic about the outlook for Swiss franc bond issuance in 2019.

As central banks retreat from public markets, spreads are widening in dollars and euros, and cross-currency basis swaps are improving for international borrowers, Swiss bankers believe the good times might be returning to a market once known the world over for diversification and arbitrage.

Kazakhstan Temir Zholy (KTZ), the Kazakh state-owned rail company, sold Sfr150m five year Swiss franc bonds on Tuesday, in choppy market conditions.

The Swiss Exchange (SIX) is calling on Swiss franc bond investors to register on Deal Pool, a new digital platform due to launch in the next few weeks.