Rival banks are flooding into a Credit Suisse-shaped hole in a resurgent market for arranging Swiss franc bond sales.
“We have indeed seen a lot of new issuance year-on-year and in that sense the collapse of Credit Suisse has not had any impact on the primary market so far,” said Markus Thoeny, a fixed-income portfolio manager at Lombard Odier Asset Management. The competition for market share might mean some banks try to win business in the short term by promising more issuer-friendly terms, he added.
Rising yields in the Swiss markets have opened up arbitrage opportunities for international issuers who can raise funding at cheaper levels than they would in the euro or US dollar markets. Investors who had previously skewed their portfolios toward equities or cash have also returned and poured money into fixed income.
The latest deal saw German healthcare firm Fresenius SE sell a 275 million Swiss franc bond this week, arranged by BNP Paribas and Deutsche Bank. Those lenders have both increased their share of the Swiss franc bond market to 7.3% this year so far, compared to 3.4% and 5.6% respectively over the same period in 2022, data compiled by Bloomberg shows.