Caisse de Refinancement de l’Habitat (CRH) launched a Sfr200m (Eu162m) 10 year issue yesterday (Tuesday), the first non-domestic Swiss franc covered bond since October, according to a lead syndicate banker.

Sole lead UBS priced the deal at 25bp over mid-swaps, after having gone out with initial price thoughts and guidance of the mid-20s area.

Terry Schmassmann, syndicate banker at UBS in Zurich, said the pricing of the deal came at the offer side quotes of CRH’s Swiss franc secondary curve.

“Its success is mirrored in CRH having repriced its Swiss franc curve by 5bp tighter post-transaction,” he said. “The deal marked the first non-domestic covered bond issued in Swiss franc since October.”

The last non-domestic Swiss franc issues were a Sfr150m eight year deal launched by Raiffeisenlandesbank Niederoesterreich-Wien in October and a Sfr200m six year deal launched by Crédit Agricole in July, according to Schmassmann.

“We have seen a bit of dislocation in the Swiss franc market, which lags the spread rally seen, for example, in the euro market – a function of absolute yields and domestic issuance,” said Schmassmann.

“We therefore looked at the relative value and secondary market flows in outstandings, which we found on the offer side.”

Schmassmann noted that CRH is a well-established issuer in Swiss francs, enjoying a strong reputation among Swiss investors after having first tapped the market in 2010. CRH has Sfr2.25bn of Swiss franc covered bonds outstanding, including yesterday’s issue, he added.

“The borrower demonstrated its commitment to the Swiss franc market and values the investor diversification, as Swiss franc deals usually attract almost 100% domestic or Swiss distribution, with dedicated Swiss funds,” said Schmassmann.

He added that, as usual for Swiss franc transactions, the deal was priced to fit demand and thus books were closed once the issuer’s maximum size was achieved.

Schmassmann said that after CRH’s Sfr200m deal was priced the issuer’s secondary curve tightened some 5bp.