Swiss Franc Bond House: Credit Suisse

IFR Awards 2019
4 min read
Jon Penner

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Firmly back at the top of the pile to reclaim its throne after a year of unchallenged leadership across all bond classes, Credit Suisse also rose to the challenges of a deeply negative interest rate environment. The bank is IFR's Swiss Franc Bond House of the Year.

Swiss Franc Bond House

Credit Suisse had a great year. Having being outgunned by UBS in 2018, it came back strongly in 2019.

The bank's number one league table position remained unchallenged after the first quarter of the year. Overall, Credit Suisse printed more than SFr16.3bn (US$16.33bn) of bonds off 151 tranches with a 32% market share over the awards period, a quarter more than its main competitor.

“The competitive landscape keeps us on our toes; we have to learn from the past and focus on the next game," said Dominique Kunz, managing director of capital markets at Credit Suisse.

Reacting decisively to challenges rather than relying on lucky shots and one-offs, the bank increased market share in every sub-segment and closed gaps where it lagged.

Credit Suisse came top in all the main league tables over the awards period: financials, corporates, public sector, supranationals, covered bonds and ABS. In transactions by both domestic and international issuers, the bank increased its market share.

It highlights the all-encompassing commitment to the Swiss franc market, compared to a much more selective approach by its main competitors.

The bank assisted several high-profile issuers return to the Swiss market after extended absences, including Orange, BMW and ABB. It advised several debut names, too, including Latin American multilateral Fonplata, German logistics company Kuehne + Nagel, Bank of the Philippine Islands, Korea Hydro & Nuclear Power and Nationwide Building Society.

"Every deal was important right from the beginning of the year – we had to maintain a consistent performance," said Ben Heck, head of Swiss bond syndicate at Credit Suisse.

Shining examples of the bank's approach were the Baloise and Swiss Life multi-tranche senior insurance deals, with both achieving tight pricing levels despite large-for-the-market sizes of SFr550m and SFr600m, respectively. The Swiss Life deal was also the first green insurance bond in the currency.

The bank's strategic goals have been constant over the years: defend its top spot, increase market share, expand the boundaries of the market with new issuers and asset classes, invest in the whole value chain in Switzerland, and promote the Swiss financial marketplace.

Credit Suisse continued to promote ABS, launched the largest Swiss franc-denominated AT1 CoCo ever by a listed bank (its own deal), and helped develop the ESG market with green transactions for Swiss Life, Zug Estates and Bank of the Philippine Islands.

Indeed, ESG is taking a prime spot in Swiss investors’ focus, with Credit Suisse's own asset management arm in September announcing a new target of SFr100bn of ESG assets by the end of 2020 from about SFr20bn today.

The continuing drop in rates saw institutional investors extend duration and private investors go down the credit curve, in the search for yield.

To service those needs, Credit Suisse brought a 40-year note from Canton of Geneva and a 25-year offering from Swisscom that both launched in August.

Indeed, the bank ranked number one with nearly a 50% share for all deals with tenors of 20 years or more.

The bank also brought several other yield-enhancing deals to the market, including unrated, crossover or hybrid deals. Issuance by Temenos, Zur Rose, KKW Leibstadt, Swiss Prime Site, Tradition and Acrotec all printed at over 1%.

Behind the scenes, Credit Suisse deploys extensive resources to develop the financial marketplace: it launched initiatives to create a legal framework for Swiss ABS and covered bonds (through the SBA and the ECBC), lobbied for a better treatment of Swiss ABS, hosted an investor event on the new European Securitisation Regulation and successfully lobbied to allow the inclusion of soft bullets in the SNB repo basket, which almost immediately led to Nationwide printing its first covered bond in the currency, joint led by Credit Suisse.

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