SNB Policy Divergence and the Cost of CHF Corporate Funding

A widening policy gap

The Swiss National Bank has maintained an accommodative stance throughout 2026, citing subdued domestic inflation and persistent franc strength. In contrast, both the European Central Bank and the Federal Reserve have kept real rates in positive territory. For corporate borrowers with operations across the eurozone and North America, this divergence reshapes the relative economics of where — and in which currency — senior debt should be raised.

Implications for senior secured facilities

For a CHF-functional-currency borrower, a five-year senior secured term loan priced off SARON now carries an all-in coupon materially below an equivalent EURIBOR- or SOFR-referenced facility. However, the headline saving must be weighed against three considerations:

• Translation risk where revenue is generated in EUR or USD
• Cross-currency basis costs if the facility is swapped into operating currencies
• Covenant headroom sensitivity to a sustained franc appreciation

Structuring response

Our capital markets desk has observed increasing demand for multi-currency revolving credit facilities with CHF-denominated term tranches. This hybrid approach allows treasurers to lock in low-cost Swiss funding for long-duration assets while retaining flexibility to draw in operating currencies for working capital.

Outlook

We expect the policy gap to persist into the first half of 2027. Borrowers with refinancing walls in 2027–2028 should consider early engagement with lenders to capture current pricing, with appropriate hedging overlays agreed at signing rather than post-close.