Canadian Imperial Bank of Commerce (CIBC) printed a CHF150m seven year covered bond on Friday, its first Swiss franc benchmark in over two years, securing a spread inside what the issuer would have been able to achieve in euros.

The CHF150m (C$197m, EUR126m) deal was priced at 100.192 with a coupon of 0.10% to yield 0.0725%. Credit Suisse and UBS were bookrunners and CIBC joint lead.

The deal is CIBC’s fifth benchmark covered bond denominated in Swiss francs, with the last a CHF200m 10 year issue in December 2015.

“While for obvious reasons one cannot achieve the size comparable to euros, US dollars or for that matter sterling – which can actually be a plus when one is not looking for size – we have traditionally viewed Swiss francs as additional investor/currency diversification while providing cost-effective funding,” Wojtek Niebrzydowski, vice president, treasury, at CIBC told The CBR.

He said the deal’s spread was 4bp-5bp inside the estimated price for an equivalent euro-denominated seven year issue.

A covered bond analyst said that the new issue spread was tight compared to domestic Pfandbriefe, supported by low issuance and a low outstanding volume of foreign covered bonds in Swiss francs. Total outstandings of foreign covered bonds in Swiss francs amount to CHF19.3bn, according to the analyst, while year-to-date covered bond issuance by foreign banks has been CHF475m, compared to CHF300m in the same period of 2017.

Asset managers took the largest share of CIBC’s deal, followed by pension funds and then private banks.