Switzerland

Kiwibank sold its debut Swiss franc covered bond on Monday morning, drawing healthy demand at a price that tightened slightly from guidance. A lack of competing supply, along with an attractive spread over domestic Pfandbrief issuers, allowed the leads to close books quickly on the oversubscribed trade.

UBS and Swedbank closed dollar benchmarks this week, pricing their deals well inside where they could have funded in euros. Demand in the dollar market far outstrips supply, and the eager investor base should help draw more borrowers looking to take advantage of the arbitrage.

UBS and Swedbank announced dollar benchmarks on Thursday, opting for the safety and favourable cross currency swap available in that market.

Moody’s assigned Kiwibank’s covered bonds a triple-A rating on Wednesday, and bankers expect it to open books on a debut Swiss franc transaction later this week.

Pfandbriefbank der Schweizerischen Hypothekarinstitute (Pfandbriefbank) priced a Sfr605m three tranche Swiss franc transaction on Friday morning. Demand for the paper was sharpened by a lack of competing issuance recently, as well as lingering uncertainty generated by the Italian elections last week.

Pfandbriefbank der Schweizerischen Hypothekarinstitute (PSHypo) priced a three tranche Swiss franc transaction on Thursday morning. It launched a new five year line, along with re-openings of 10 and 16 year bonds. Unusually for a Pfandbriefbank trade, investors focused on the shortest of the three tranches.

Raiffeisenlandesbank Niederösterreich-Wien made its debut in the Swiss franc market on Thursday, with a Sfr150m 1% November 2020 covered bond.

On Wednesday morning Pfandbriefbank der Schweizerischen Hypothekarinstitute — the institution responsible for providing Swiss mortgage banks with loans to finance their mortgage businesses — issued a triple-tranche transaction totalling Sfr782m.

The stressed cover pool losses of Australia’s covered bonds are worse than those in core Europe, Moody’s first performance overview of the jurisdiction revealed on Tuesday. However, Australia still boasts highly rated issuers and impressive collateral scores.

Over the last 18 months, more and more international corporates have discovered the attraction of the Swiss franc bond market, with many borrowers tapping the sector for the first time. High yield borrowers have found that they have access to the market, while last October German utility RWE became the first international corporate name to issue a hybrid capital transaction in Swiss francs. But does the market remain a niche funding pool, to be used only infrequently by borrowers to top up their borrowings in other currencies, or have Swiss francs become a core financing tool for international corporate borrowers? EuroWeek gathered together some of the leading dealers and borrowers to discuss the opportunities.

Pfandbriefbank sold a Sfr435m ($474.4m) triple tranche bond on Thursday via Deutsche Bank, UBS and Raiffeisen Bank that included a new 15 year deal and two taps. The former was priced in line with investor preferences thanks to a Swiss franc market saturated with long dated supply.

ASB Finance New Zealand joined the caravan of inaugural transactions from Australia’s largest banks this year when it launched its debut Swiss franc transaction on Monday — a Sfr150m minimum 6-1/2 year fixed rate covered bond.