Valiant Bank will issue its first covered bonds in the coming weeks, targeting an issue of at least Sfr150m, the Swiss bank announced today (Thursday) after receiving a provisional Aaa covered bond rating from Moody’s.

“Valiant has made its mark on the Swiss financial sector with its covered bonds, the first to be issued under Swiss law and secured by a Swiss guarantor,” the bank said in a statement accompanying its third quarter results.

The bank announced that its first tranche of covered bonds, which will have a minimum size of Sfr150m (Eu129m) and be backed by residential mortgages, will be issued in mid-November. It added that the bonds will be listed on the SIX Swiss Exchange at the end of the month and will offer institutional investors “an attractive alternative within the triple-A segment”.

The retail and SME bank announced plans to enter the covered bond market last year, and in August said it was targeting a debut in the fourth quarter.

Moody’s assigned Valiant’s covered bonds the provisional Aaa rating yesterday (Wednesday). The rating agency said that notable aspects of the programme’s structure include an option for a one year soft bullet maturity extension and an LTV limit of 80%. Valiant will provide up to 50% overcollateralisation on a committed basis.

Based on a timely payment indicator (TPI) of “probable” – in line with those of previously issued Swiss covered bonds with a one year soft bullet – the TPI Leeway for the programme is zero notches.

The rating agency noted that as of 31 July, Valiant’s cover pool totaled approximately Sfr246m, comprising 535 residential mortgage loans.