Green shoots
In a big year for green issuance in the Swiss market, Swiss Life brought the first bond in the format from an insurance company in Swiss francs.
Although Swiss Life has been reporting on its ESG and corporate responsibility activities since March 2016, it was only this year that it established a full green bond framework.
Ahead of the deal, the company decided to forego hosting a roadshow, although it did release a net roadshow.
The bond was mandated on November 6 and printed the following day. Books opened for an envisaged SFr500m triple-tranche deal comprising a two-year floating-rate note and 5.5-year and 9.25-year fixed tranches before the final size was increased to SFr600m. Pricing on all three notes came at the tight end of guidance.
The two-year tranche was structured as a collared FRN to appease the needs of bank treasury investors. With Swiss rates so low it is effectively a 0% coupon bond.
The levels were in line with the issuer's secondary curve, but the size demonstrated the allure of the green label. Baloise, another Swiss insurer, had managed to take SFr550m out of the market with a four-tranche conventional deal in September.
At SFr600m, it was the largest non-SSA green bond in francs to date. One lead quoted the final book at around SFr850m across the three tranches, while others put it at around SFr1.2bn, making it one of the largest and most oversubscribed books of the year.
"Investor demand was huge, despite spreads widening ahead of the deal," said Matthias Ogg, head of capital market special products at ZKB, one of the three lead managers and bookrunners on the deal alongside Credit Suisse and UBS.
The Swiss Life team was particularly impressive in putting together its green framework in a short space of time.
"With this first green bond issuance, we underline our continued commitment to responsible investing, in this case with regard to energy-efficient buildings" said Swiss Life CFO Matthias Aellig.
The proceeds will be used in line with the insurer’s green bond framework, which focuses on real estate.
"Not only does this transaction constitute a successful inaugural green bond issuance for Swiss Life but it also serves as a testament to its strong name recognition and scarcity value in the Swiss franc market," said Manuel Gadient, head of debt capital markets and syndicate at UBS, which was the documentation bank for the deal.
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