July is traditionally a quiet month on the Swiss capital market due to the holiday season. July 2025 both confirms and contradicts this rule.

On the one hand, the issuance volume (excluding Swiss Confederation bonds) from domestic and foreign issuers fell from 6,1 billion francs in June to 4,6 billion francs. However, the summer lull was less pronounced than in the past two years, notes Tim Schmucki from the capital markets team at Zürcher Kantonalbank (ZKB). The volume was 81 percent higher than in July 2024.

Record Volume for the Pfandbriefzentrale

Two further observations don’t quite fit the image of an uninspired primary market. The Pfandbriefzentrale raised more money than ever before with a transaction spread over four tranches, securing 1'858 million francs on behalf of its member cantonal banks.

Another noteworthy issuance, although not because of its size, came from real estate company PSP Swiss Property, which launched a two-year bond worth 155 million francs. Uniquely, the bonds were issued with variable interest rates instead of the usual fixed rates. According to the ZKB newsletter, this is the first exchange-listed bond in the Swiss capital market to bear interest based on SARON.

First SARON-based Floater

SARON is the most important short-term interest rate in the Swiss money market and holds overarching significance. It serves as a key reference rate in the mortgage business and the Swiss National Bank (SNB) aims to keep SARON as close as possible to its policy rate in implementing monetary policy.

Before the financial crisis, floaters were a standard instrument in the Swiss franc bond market. Back then, they were based on LIBOR, which fell into disrepute due to manipulation allegations and liquidity issues and was eventually replaced by SARON. The prolonged low-interest environment further contributed to their decline. The last floater, still based on LIBOR, was issued by Swiss Life Holding in November 2019. The calculation of the Swiss franc LIBOR was permanently discontinued at the end of 2021.

A Dried-Up Market Revived

Currently, according to the SIX Bond Explorer, there are no outstanding Swiss franc floaters—PSP has thus reopened a dried-up market segment. The instrument offers an attractive alternative for investors with a short-term focus who wish to invest securely without interest rate risk.

Besides Pfandbriefzentrale and PSP, other active issuers in the domestic segment in July included the Pfandbriefbank, Graubündner Kantonalbank, and the City of Lugano.

In the international segment, supranationals and quasi-sovereign issuers dominated. The first category includes sustainable bonds from the Inter-American Development Bank, the International Finance Corporation with a Green Bond, and the Asian Development Bank. The second category features Nederlandse Waterschapsbank and BNG Bank with Social Bonds, as well as Landwirtschaftliche Rentenbank.

Locking in Positive Yields on High-Quality Issuers

Also present were the Province of Ontario, the Republic of Austria with a Green Bond, and financial institutions such as Toronto-Dominion Bank and Münchner Hypothekenbank with a Covered Bond.

What stands out is the high credit quality of issuers active in July. «There was strong demand for high-quality bonds as investors tried to lock in positive yields in the face of looming negative interest rates,» ZKB explains.

Sword of Damocles: US Tariffs

Moreover, ZKB expects activity to pick up as early as next week—before the end of the school holidays in Zurich, the capital market hub. The pipeline is well-filled, and some issuers are eager to secure a «first-mover advantage,» notes the state-owned bank, which is itself active in the issuance business. This suggests that August could defy its reputation as a weak month. However, the sword of Damocles in the form of a 39 percent tariff on Swiss exports to the US looms large, which, should the fragile thread snap, could significantly slow down the primary market.

On Monday, SIX published trading figures for July on the SIX Swiss Exchange and the BME Exchange. According to these figures, bonds worth 10,4 billion francs were traded on the secondary market. This volume was only slightly below the previous month’s (-0,8 percent) and significantly above the figure for the same period last year (+4 percent).

Secondary Market Also Performing Well

The year 2025 has been strong so far. From January to July, bonds worth 77,4 billion francs were traded, a 10 percent increase compared to the previous year.

However, there are doubts about the significance of the SIX statistics. In June, Richard Mooser, Chief Investment Officer at Axa Investment Managers, pointed out in an interview with finews.ch that SIX Swiss Exchange’s reporting obligations are being increasingly undermined, with trades often conducted via Singapore or London. Mooser estimates that today, around half of the trading volume is no longer being reported.