Emerging Markets Tap Swiss Francs to Ride Low-Interest Wave

Emerging-market borrowers are diversifying their funding sources by issuing bonds in Swiss francs. Chile's Banco BICE held investor meetings for a Swiss-franc debt sale this week, following the country's inaugural deal last Monday. On September 25, Chile sold 380 million francs ($458 million) in a two-part bond sale, marking its first-time issuance in Swiss francs. This move comes after Mexico's conglomerate Fomento Economico Mexicano SA issued its first-ever Swiss-franc bonds last week.

The trend of issuing bonds in Swiss francs is driven by the demand for yield in a country with a zero policy rate. Emerging-market borrowers are seeking to tap into this demand and diversify their funding sources. Latvia was another country that ventured into this market, offering its inaugural Swiss-franc bonds in July.