Wednesday, 19 December 2018

Swiss Franc Bond House: UBS

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  • Beating the odds

Beating the odds

After a very public refocusing in 2012, the year looked daunting at the start, but UBS managed to capture the Zeitgeist of the market in 2013. For its consistent innovation, expertise and tenacity in the face of adversity, UBS is IFR’s Swiss Franc Bond House of the Year.

All did not look promising for UBS at the beginning of 2013. The bank had just announced its new “Accelerate” programme, with a public global retreat from the SSA market. The first half of the year seemed to consist of roadshows and meetings to reassure people that it was still in the game.

Despite losing out to arch-rival Credit Suisse on a volume basis, UBS managed to take pole position in several key areas. Most of those formed the core focus points of interest for the Swiss market in 2013.

UBS intensified and grew its presence in the emerging markets, concentrated hard on domestic corporates, especially small and medium-sized enterprises, and opened a whole new segment of the market with hospital finance.

Driven by its three franchise pillars – “best in class advisory and execution services”, “broadest distribution capabilities” and “leading trading franchise” – UBS strengthened its corporate, financials and emerging markets footprint further, while maintaining a leading role as underwriter of public sector debt.

One of the traditional mainstays of the Alpine market, high-grade international issuance was driven to new lows by a mix of favourable conditions in the larger euro and US dollar markets, as well as an unfavourable basis swap.

The loss of some international SSA activity did not spread to the domestic market, though, where UBS gained a position on the bookrunner list with Credit Suisse for Pfandbriefbank allowing a more level playing field in the domestic bond race. UBS also took part in many of the Canton and municipal deals over the year, including Bern, Geneva, Zurich City and Canton, and Basel-Landschaft.

Despite largely pulling out of global SSA in 2012, UBS also managed to bring one of the few high-grade European agencies of the year with an upsized SFr325m (US$359m) Oesterreichische Kontrollbank 1.25% July 2020 deal.

In the domestic corporate sector, UBS led the field, bringing names such as Straumann, AEVIS and Baloise on its own, as well as being joint lead on the most impressive Swiss corporate bond of the year – the bumper hybrid from Alpiq.

Local financials were not forgotten either, with deals from the likes of Valiant Bank, Swiss Life and Zurich Insurance all under UBS’s belt.

Of course, UBS was instrumental in the design and implementation of what was arguably the most unusual and interesting bond in any market in 2013: Swiss Re’s 32-year non-call seven-year dual trigger contingent capital note, containing writedowns in the event of a capital crisis or an insurance event.

UBS even got in on that rarest of rarities, a Swiss franc ABS, when it took joint lead position with Credit Suisse for BMW’s auto receivables, the Bavarian Sky SFr300m Triple-tranche bond in April.

In the emerging markets, UBS expanded its coverage, adding both depth as well as breadth to its franchise. It opened the Swiss market for CABEI in January with the supranational’s debut bond, and followed with paper from every major EM segment, including the first ever African mandate in francs from the aptly named African Bank.

IFR’s Swiss Franc Deal of the Year was also brought by UBS (alongside BNP Paribas and Gazprombank) when Russian giant Gazprom returned to the market to much fanfare in October with its well oversubscribed SFr500m six-year.

No hospital pass

If all that wasn’t enough, UBS also opened an entirely new market segment late in the year. Following on from Swiss legal changes at the beginning of 2012, UBS embarked on a long-term relationship-building exercise to transition Swiss hospital funding over to the public markets.

Spitalverband Limmattal brought a SFr100m 10-year debut transaction, the first in a segment estimated to amount to over SFr1.5bn per annum in the years to come.

“We dominated domestic corporate and financial issuance in what one can easily call the ‘domestic year of the decade’, as well as capital issuance, and expanded our emerging market and public sector franchises,” said Manuel Gadient, UBS’s head of DCM and syndicate in Zurich.

To see the full digital edition of the IFR Review of the Year, please click here.

To purchase printed copies or a PDF of this report, please email

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