Crédit Agricole sold the first non-domestic Swiss franc covered bond in over 18 months today (Monday), a Sfr200m 10 year obligations de financement de l’habitat deal, taking advantage of the recent rise in yields to offer a more substantial return than was previously possible for triple-A paper.

The deal is understood to be the first public Swiss franc-denominated covered bond from an issuer outside Switzerland since January 2016, when Crédit Agricole last tapped the market.

Crédit Agricole Home Loan SFH bookrunner Credit Suisse and joint lead Crédit Agricole launched the new Sfr200m (Eu182m) obligations de financement de l’habitat this morning with guidance of the mid-swaps minus 4bp area, and an indicative coupon of 0.3% and indicative yield of 0.26%. The deal was later priced at minus 4bp, with a coupon of 0.25% to yield 0.242%.

A lead syndicate banker said the recent rise in yields had encouraged Crédit Agricole to return to the market.

“It opens up new opportunities for triple-A covered bond issuers like CASA, because it means they can get to yield levels in Swiss franc terms that are more attractive to investors,” he said. “A yield of a quarter or so might not sound like a lot to euro or dollar investors, but in Swiss terms, for a triple-A bond, it is more substantial.

“This yield environment is beneficial for people looking for triple-A paper with a positive yield.”

The lead syndicate banker added that the deal had been priced around 10bp inside the 10 year outstandings of domestic issuers.

“The reason for that is that given the scarcity of this kind of paper, people put some value on the fact they can diversify away from the domestic market,” he said.