Swiss Franc Debt Lures First-Time Issuers From Chile to Latvia
(Bloomberg) — Emerging-market borrowers are stepping up bond sales in Swiss francs, many of them venturing into the market for the first time as they diversify funding and tap demand for yield in a country where the policy rate is zero.
Chile sold 380 million francs ($458 million) in a two-part inaugural deal on Monday, following the first-ever Swiss-franc issuance by Mexican conglomerate Fomento Economico Mexicano SA last week. Chile’s Banco BICE also held investor meetings over a Swiss-franc debt sale this week, while outside of Latin America, Latvia offered inaugural bonds in francs in July.
Developing-world sovereigns and companies have sold about $3.9 billion worth of Swiss franc-denominated bonds so far this year through Monday, almost triple the same period of 2025, according to data compiled by Bloomberg. That is the fastest pace since 2019 — but still a tiny fraction of the $610 billion raised by emerging borrowers in hard currencies, the data show.
“Creating the pipeline to a non-US dollar market gives sovereigns additional options, which is valuable in the current environment,” said Petar Atanasov, co-head of sovereign research at Gramercy Funds Management. “We expect them to continue to seek increasing diversification when opportunity presents itself.”
With Swiss policy rates at 0%, high-quality emerging-market sovereign debt is looking attractive to local investors searching for yield, he added.
Demand for Chile’s deal came “almost entirely” from Swiss investors, the country’s Finance Ministry said in a statement.
Entering the Swiss-franc market “establishes five- and 10-year sovereign benchmarks in the currency that could serve as a reference for other Chilean issuers,” the ministry said.
To be sure, the Swiss-franc market lacks the depth and liquidity of its dollar and euro counterparts, limiting its potential to become a significant source of funding for developing-world borrowers.
Still, borrowers may be attracted by lower nominal coupons even if the advantage narrows once the proceeds are hedged back into US dollars, said Viktor Szabo, an investment director at Aberdeen Investments.
“This market is likely to be accessible only for the highest-rated EM credits,” including those in the A and BBB categories, Gramercy’s Atanasov said. “It should not be seen as a potential replacement, but as a complement” to other hard-currency markets.
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