Switzerland

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.

UBS attracted $3bn in orders for its latest dollar trade, highlighting the depth of demand for the right European name. Swiss spreads are still cheap by historical standards and US buyers still wary of European supply, but dollar issuance from a strong eurozone name was a possibility, said syndicate bankers.

Dollar issuance continued its record breaking run on Tuesday, as UBS launched its second benchmark of 2012 in that currency. Sterling and dollars have had record first quarters, though euro supply remains subdued.

Australia and New Zealand Banking Group looks set to become the third Australian borrower to issue in its domestic currency. ANZ has mandated leads for a four year dual tranche, fixed and floating rate benchmark. Westpac has issued its first deal denominated in Swiss Francs

Credit Suisse attracted a staggering 168 investors for its $2bn three year trade, more than double the interest recent Canadian dollar benchmarks have enjoyed, and it still had to leave some prospective buyers empty handed. The three year 144a/RegS trade was increased from the original $1bn target print on the back of huge demand, and was priced through the secondary curve of Swiss peer UBS on Thursday evening.

Société Générale built a €6bn book for its second trade of 2012 on Thursday, pricing a €1.5bn benchmark well inside initial guidance. Meanwhile, Credit Suisse launched only the second dollar trade from a European bank since last September.

Swiss franc Australian covered bonds remained in vogue this week, with Commonwealth Bank of Australia issuing the largest one yet — a Sfr775m dual trancher — on Wednesday, after Australia and New Zealand Banking Group opened the way for its peer group with a Sfr725m icebreaking transaction in January.