Swiss Franc Bond House: Credit Suisse

IFR Awards 2020
4 min read
Jonathan Penner

A cool head
Like every other financial market, the Swiss bond market in 2020 was shaped by the global pandemic. Issuers and their bookrunners had to be strategic, but also nimble. For keeping a cool head while showing consistent leadership and versatility, Credit Suisse is IFR’s Swiss Franc Bond House of the Year.

Swiss Franc Bond House

Credit Suisse closed coverage gaps in 2020, further developed its green and ABS businesses and captured a high share of primary issuance in the Swiss franc market.

From March, the Covid-19 pandemic caused a fall in economic activity of unprecedented magnitude. But it also created opportunities that Credit Suisse was able to seize, bearing testimony to the breadth, strength, quality and innovation of its Swiss franc franchise.

Despite ultra-volatile rates, Credit Suisse retained its number one position overall and, in some segments, increased its market share.

Early in the crisis, the bank identified an arbitrage window for Canadian issuers and reopened the market for international borrowers. It was sole bookrunner on a SFr100m (US$103m) eight-year covered bond from Bank of Nova Scotia that set off a two-week spree of deals from Canadian banks and provinces.

Indeed, Credit Suisse dominated the field for international issuers, gaining a staggering 44% market share by volume in 2020 for this segment. In total, it was a lead on 33 of the 58 done in the international sector, including Ford Motor Credit's return to the Swiss market after nearly two decades with its SFr230m 2.125% four-year note, which is IFR’s Swiss Franc Bond of the Year.

Its leadership extended to domestic clients too, as Swiss issuers clearly showed which underwriter they trusted most in times of crisis.

For 2020 overall, Credit Suisse had a market share of about 25% for all domestic issuance by volume and led on 100 of the 174 deals.

It also came top in nearly all the major market segments – financials, corporates, public sector, covered bonds and green bonds, only missing out on the top ranking for emerging markets issuers. In the ABS segment Credit Suisse was sole structurer and bookrunner on four of the five securitisation transactions in the year.

Its dominance is perhaps best illustrated in ESG issuance. It was involved in seven of the 10 ESG deals printed in 2020. Credit Suisse advised African Finance Corp on its ESG framework; arranged North American Development Bank's innovative transaction switching out of conventional US dollar bonds and offering investors longer-dated Swiss franc green bonds; and helped Muenchener Hypothekenbank become the first international bank to issue a senior green bond in the currency.

"Being number one forces us to work harder. You have to expand the boundaries of the market in the macro scale and react quicker in the micro scale. Pride is in our DNA." said Dominique Kunz, managing director in the capital markets team.

Benjamin Heck, head of Swiss franc bond syndicate, said: "We have to provide the best possible service to issuers and investors alike and help the marketplace thrive, even in the most volatile markets in decades. It is how we have been number one for the last three decades."

Other highlights included deals from Helvetia Schweizerische and Societe Nationale SNCF. Swiss insurer Helvetia Schweizerische brought a trio of hybrids, two in late January in perpetual and dated callable format – perpetual non-call 6.5-year and 20.5-year non-call 10.5-year notes, totalling SFr400m – and a SFr200m perpetual non-call 7.5-year green hybrid in mid-November. That last deal went to about 50 investors and only paid 25bp more than the pre-Covid-19 crisis non-call 6.5-year bond.

French agency Societe Nationale SNCF printed its debut in the Swiss market in early June, a SFr250m 0.227% 10-year note that achieved double-digit arbitrage versus the issuer’s euro secondaries, and amassed a book of over SFr500m with more than 40 accounts taking part.

"2020 asked a lot from all of us, but we can all proudly say that we once again overcame all the obstacles and used this new experience to get out of the crisis even stronger and more agile than before" said Heck.

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