By Marta Vilar – MADRID (Econostream) – Following is the full transcript of the interview conducted by Econostream on 13 March 2026 with Adrián Martínez, Vice Director of the Swiss Federal Finance Administration.

Q: Mr Martínez, you reopened two bonds on March 11. How did the transaction go?

A: We reopened two bonds, maturing in 2034 and 2042, and the transaction went very well. We hadn’t tapped either bond for some time—about five years in the case of the 2042 line. Since last summer, bidding volumes had generally been lower, partly reflecting compression of the Swiss yield curve and reduced issuance volumes, and that pattern continued through the February auction.

More recently, however, Swiss swap spreads have widened, including for Swiss Confederation bonds, which appears to have supported stronger investor participation.

In the latest auction last Wednesday, demand reached CHF 516 million for the 2034 reopening and CHF 306 million for the 2042 reopening—both well above recent levels. We allocated around CHF 440 million across both tranches, resulting in bid-to-cover ratios of 2.3 and 1.4, respectively. Importantly, both reopenings cleared above the bid levels at the auction cutoff, and unlike earlier auctions this year we did not need to offer price concessions to reach our target volume.

Overall, the stronger outcome likely reflects wider swap spreads, higher outright yields and possibly some safe-haven demand amid current geopolitical developments.

Q: This auction happened after the Iran conflict began. Have you seen any impact on demand from that conflict and the market volatility it created?

A: We don’t see any direct impact. In our discussions with investors and during our pre-auction market soundings, this hasn’t really come up. That said, demand in the latest auction was stronger, and it’s possible that some of that reflects safe-haven demand.

Q: Will you make any changes to your strategy for future issuance in light of recent developments?

A: No. Our funding needs are primarily determined by the federal budget, so unless that changes significantly we will not alter our issuance targets or strategy. We will continue accessing the capital markets once a month, typically on the second Wednesday.

Q: Could there be any changes in maturity selection?

A: Maturity selection always reflects several factors. We target an average duration of around 12 years to balance interest rate risk and funding costs, but the decision also depends heavily on investor demand in each auction. If demand is stronger at the long end, for example, we may choose to reopen longer-dated bonds.

Q: Do you think the current situation has led to safe-haven flows into Swiss bonds?

A: We don’t have firm data to confirm that; it’s more anecdotal. Demand was stronger in the March auction than in January or February, and geopolitical tensions in recent weeks could be one explanation.

Q: In January you reopened two bonds, then another two in February and again in March. Is another reopening the most likely outcome for the April auction?

A: Possibly. When we issue a bond, we usually reopen it several times until the outstanding volume reaches around CHF 4–5 billion, which helps ensure liquidity in the secondary market.

Because Switzerland’s outstanding debt is relatively small, we cannot cover the entire yield curve with individual bonds. Instead, we ensure that maturities from one to 13 years are covered by liquid bonds, and beyond that we create anchor points along the curve up to about 50 years.

We typically issue one new bond each year. The timing also depends on the federal treasury’s cash balance, which fluctuates significantly as direct taxes are collected between March and June. Cash balances usually peak in June, so new bonds are often issued between April and June.

Q: Can you give any indication of the maturity of the next new bond?

A: Our issuance framework ensures that maturities from one to 13 years are covered by liquid bonds, with additional anchor points further along the curve. Based on our current bond profile, the next gap is around the 2041 maturity.

Q: Which part of the Swiss yield curve is currently seeing the strongest investor demand?

A: Over the past year, demand has been particularly strong at the long end of the curve, which is why the average duration of our issuance was slightly above our 12-year target.

Since the start of this year, however, we’ve also seen strong demand from treasury accounts for maturities of up to 10 years. That’s one reason we reopened the 2034 bond this week.

Q: What criteria do you use to decide which bonds to reopen at each auction?

A: Our target issuance duration of around 12 years is one key factor. Beyond that, investor demand—gauged through market soundings ahead of each auction—plays an important role. Although we publish an auction calendar, we retain flexibility to decide which bond to reopen.

Q: What does your investor base look like in terms of domestic versus international investors?

A: Most of our investors are domestic, particularly institutional investors such as pension funds and insurance companies. The share of foreign investors has declined in recent years and currently stands at around 12%, down from roughly 20% a few years ago. So, we rely heavily on domestic demand. Further information can be found in our annual activity report. The latest edition will be published on 20 March and will be available on our website.

Q: Given the many global developments over the past year, have U.S. policy changes—such as those under the Trump administration that have weakened the dollar—had any measurable impact on demand for Swiss Confederation bonds?

A: Periods of high uncertainty usually support demand for Swiss government bonds. However, the developments over the past year have not led to noticeably different demand patterns.

Switzerland is clearly seen as a safe haven, but our government bond market is relatively small, so it’s difficult to observe all global safe-haven flows directly in our market.

Q: Does the recent strengthening of the Swiss franc, and the possibility of SNB intervention, affect the Confederation’s issuance strategy or timing?

A: No. Exchange rate developments or potential central bank interventions do not play a role in our issuance decisions.

Q: Could a more prominent euro or increased issuance of common European debt have negative implications for Swiss government bonds?

A: We don’t expect any adverse effects. Switzerland benefits from a strong domestic investor base supported by a large pension system and insurance sector, and the Swiss franc also attracts investors.

Historically, Swiss and German government bond yields—especially at the long end—have been closely correlated. As long as both are seen as high-quality safe-haven assets, we don’t see major implications.

Q: To what extent is your issuance driven by funding needs versus yield-curve management?

A: Funding needs are clearly the main driver. At the same time, we try to support a well-functioning and liquid market by maintaining key points along the yield curve. Our ability to manage the curve is somewhat limited, however, because Switzerland has relatively low outstanding debt.

Q: Is further green bond issuance under consideration?

A: We currently have one outstanding green bond, maturing in 2038, issued in 2022. It is fully integrated into our standard issuance framework and treated like any other bond.

Our aim is to bring each bond line to around CHF 4–5 billion outstanding to ensure liquidity in the secondary market. That means we may tap the green bond again—possibly this year. However, issuing a new green bond line is unlikely until the existing one reaches its target size.

Q: Switzerland has historically relied exclusively on auctions. Are there circumstances under which syndications might become part of your toolkit?

A: Our auction system provides flexibility and predictability for investors, and we have not considered using syndications recently—not even during COVID.

Even when our funding needs were almost double current levels during the pandemic, we were able to meet them entirely through auctions. Syndications might only become relevant if our funding needs increased substantially or if we needed to issue very large amounts at once, but that’s not something we foresee.

Q: Would you ever consider using buybacks or switches?

A: We have looked into those tools, but instead we support liquidity through a repo lending facility, which is, together with the sale of own holdings, currently our main instrument for maintaining liquidity in the Swiss government bond market.

Q: You reduced the auction window this year from 90 minutes to 30 minutes. What was the rationale, and did it affect participation or price formation?

A: No, it hasn’t had any impact. The change was simply meant to make the process more efficient and align it with actual bidding behavior. Previously the auction lasted 90 minutes, but most bids were submitted in the final 20 minutes.

Before making the change, we consulted investors and banks, who were comfortable with it, and we have not observed any negative effects since.