Switzerland

European banks are set to follow sovereign and supranational institutions and begin issuing senior bonds dedicated to fighting Covid-19 under existing ESG frameworks.

The Canton of Geneva took its 2020 funding up to almost Sfr1.2bn ($1.2bn) this week with a triple tranche deal — the most it has funded in a single year since 2013, according to Dealogic. Elsewhere, an attractive basis for dollar funders led a pair of rare issuers to return to the market.

Rating: A1/AA-

A Sfr350m block trade in shares of Swiss software company SoftwareOne was priced quickly last night as investors rushed into the first equity capital markets deal in the company's stock since its 2019 IPO.

Banks are spying new opportunities with green and social bond funding, with the asset classes having outperformed in the credit markets during the coronavirus crisis.

Credit Suisse has become the first Swiss bank to issue a green bond in the euro market, and has also marketed a rare floating rate note. The trades were testament to improving market conditions and the ability for strong names to sell less common products.

Issuers are starting to feel more comfortable with the new normal of wider spreads as a flurry of deals dusted the Swiss franc market, including a rare operating-company level visit from UBS.

Swiss franc bond spreads have failed to tighten as much as they have in the euro market, and the lack of price action meant few issuers ventured out this week. A trio of domestic deals comprised the only new supply.

Dufry, the Swiss duty free concession operator, attracted healthy demand for its emergency sale of new shares and convertible bonds on Thursday night — a transaction designed to raise as much liquidity as possible so it can survive the coronavirus pandemic, which has led to a huge drop in the number of shoppers at its airport stores.

Triple-B rated fragrance and flavourings company Firmenich sold its debut bond this week, a short end Swissie deal that was the prelude to dual tranche euro trade.

BNP Paribas and Crédit Agricole have become the first euro area banks to launch senior bonds for nearly two months. They joined UBS in the euro market on Tuesday, taking advantage of a recent rally in credit spreads across the sector.

Yankee bank and insurance names took centre stage in the dollar market as US banks prepared to give their first insight into the impact of the coronavirus with the arrival of bank earnings season.