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Bond Market News
Julius Baer’s Dollar Bonds Drop on Finma’s Scrutiny Over Signa
November 22, 2023
Julius Baer’s dollar bonds were down as much as 4 points after news that its €600mn ($655mn) exposure to Signa Holding GmBH was now being monitored by Swiss regulator Finma, according to sources. The company had set aside CHF 70mn ($79mn) for souring debt in the first weeks of November. As a consequence, on Monday, Julius Baer warned investors that it expects lower profit for FY 2023 compared to previous year. Julius Baer’s bonds have been under pressure since the start of November, when rumours started surfacing about its exposure to Signa. According to Bloomberg, Signa is seeking to avert a liquidity crunch and is approaching investors for about €500mn ($546mn) in cash to meet obligations this year, with another €1.5bn ($1.6bn) needed in 1H 2024. Julius Baer previously helped Signa with a bridge loan to buy a 50% stake in Switzerland’s Globus luxury department store chain in 2020, and also provided a £300mn ($376mn) loan to help with the acquisition of UK department store Selfridges.
Julius Baer’s dollar bonds traded weaker and were among the top losers with its 3.625% Perp down 4.3 points to 60.7 cents on the dollar, yielding 16.7%.
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