Welcome to CapLaw

CapLaw is the first electronic newsletter providing up-to-date information on legal and regulatory developments, concise articles and reports on deals and events with particular focus on Swiss capital markets. CapLaw is addressed to all Swiss and international lawyers, in-house counsels financial institutions and corporates as well as those who are interested in the Swiss capital markets.

The Editors
René Bösch, Homburger AG
Thomas Reutter, Bär & Karrer AG
Patrick Schleiffer, Lenz & Staehelin
Peter Sester, University of St. Gallen
Philippe A. Weber, Niederer Kraft & Frey AG
Thomas Werlen, Quinn Emanuel Urquhart & Sullivan, LLP

Bär & Karrer Advised Orior on the Placement of Shares by Way of an Accelerated Bookbuilding

Orior AG successfully placed 592,499 new shares by way of an accelerated bookbuilding in a private placement with institutional investors. The placed shares are sourced from the company’s existing authorized share capital and the pre-emptive rights of the existing shareholders have been excluded.

Bär & Karrer Advises Novartis on the Placement of EUR 2,250,000,000 Guaranteed Notes

Novartis Finance S.A. completed the placement of EUR 750,000,000 Guaranteed Notes due 2023, EUR 750,000,000 Guaranteed Notes due 2030 and EUR 750,000,000 Guaranteed Notes due 2038. The 2023 Notes were issued at 99.655% of their principal amount with an interest of 0.500% and will mature on 14 August 2023 at their nominal value. The 2030 Notes were issued at 99.957% of their principal amount with an interest of 1.375% and will mature on 14 August 2030. The 2038 Notes were issued at 99.217% of their principal amount with an interest of 1.700% and will mature on 14 August 2038. The Notes are guaranteed by Novartis AG. They have been provisionally admitted to trading at the SIX Swiss Exchange and are expected to be listed there as well.

Swiss Capital Markets: New Rules regarding Swiss Withholding Tax

A bond issued by a foreign resident issuer but guaranteed by its Swiss resident parent company is reclassified as a domestic issuance and subject to 35 percent withholding tax if the proceeds raised under such bond are used in Switzerland. According to new rules which entered into force on 1 April 2017, it is possible to use the proceeds in Switzerland up to an amount equal to the equity of the foreign issuer and to still avoid a reclassification.

By Stefan Oesterhelt (Reference: CapLaw-2018-01)

Cross-Border Transactions in Intermediated Securities: Switzerland Maintains its Lead (Part 2/2)

“The transnational nature of collateral goes beyond the mere (but important) fact that the parties to a swap are often incorporated in different jurisdictions. Collateral may be posted in different currencies, or in the form of government bonds issued by different governments. The collateral is held with intermediaries often incorporated in yet other jurisdictions, with places of business in still other locales. These intermediaries book the collateral in computerized ledgers maintained on servers that may be located elsewhere in the world. And if, as is permitted under the law of some countries, the pledgee (the party that receives the collateral) “repledges” the collateral to yet another party to satisfy its own obligations, which then repledges it again, then lawyers are left to make sense of a constant global movement of collateral in and out of accounts in many jurisdictions in terms of legal rules created to address a far more stationary and localized conception of property and contract rights.”

Annelise Riles, Collateral Knowledge: Legal Reasoning in the Global Financial Markets, p. 43 (University of Chicago Press, 2011)

By Thomas Werlen / Matthias Wühler / Jonas Hertner (Reference: CapLaw-2018-02)

Basel III Implementation in Switzerland: Leverage Ratio and Liquidity

As of 1 January 2018, further elements of the Basel III international regulatory framework for banks on capital and liquidity entered into effect in Switzerland. Notably, the unweighted capital adequacy requirement (leverage ratio) was extended from systemically relevant banks to all banks by requiring a minimum core capital (Tier 1 capital) to total exposure ratio of 3%. As of the same date, the liquidity coverage ratio (LCR) requirement were adjusted to provide for certain simplifications, which will primarily benefit smaller financial institutions. The risk diversification requirements of Basel III measured against Tier 1 capital will enter into effect in Switzerland in 2019. The introduction of the net stable funding ratio (NSFR), which was originally planned for 1 January 2018, has been postponed.

By René Bösch / Benjamin Leisinger / Lee Saladino (Reference: CapLaw-2018-03)

New Swiss financial market regulation: Consequences on pension funds, investment foundations, their asset managers and advisors

The new Swiss financial market regulation will take effect in the second half of 2019 or in 2020. The new acts, namely the Financial Services Act and the Financial Institutions Act are particularly relevant to external asset managers of pension funds and investment foundations. The pension funds and investment foundations themselves will not be directly impacted, but will indirectly benefit from increased conduct and transparency rules and the fact that their external asset managers henceforth will be subject to supervision by FINMA or a FINMA-authorized supervisory organization.

By Sandro Abegglen / Evelyn Schilter (Reference: CapLaw-2018-04)

Valora Holding CHF 166 million Rights Offering

On 9 November 2017, Valora Holding AG (Valora) launched its right offering of up to 687’119 registered shares. On 21 November 2017, Valora Holding AG completed the capital increase raising net proceeds of approximately CHF 166 million. The capital increase was executed as an “at market” rights offering. The offer price for the new shares of CHF 310 per new share was determined following a bookbuilding process for the shares not taken up by existing shareholders. Credit Suisse and J.P. Morgan acted as Joint Global Coordinators and Joint Bookrunners. Valora is listed on the SIX Swiss Exchange. It runs a retail network of convenience and food-service outlets in Switzerland, Germany, Austria, Luxembourg, the Netherlands and France, and is also a leading producer of pretzels. Valora will use the proceeds from the capital increase to refinance its recent acquisition of BackWerk, to finance the expansion of production capacities, to refinance existing capital market instruments and for general corporate purposes. The newly issued shares were be traded on the SIX Swiss Exchange for the first time on 22 November 2017.

St.Galler Kantonalbank AG successfully issued CHF 100 million Additional Tier 1 Notes and CHF 100 million Tier 2 Notes

On 16 November 2017 St.Galler Kantonalbank AG (SGKB) launched, and on 30 November 2017 successfully completed, the issuance of CHF 100 million 1.70 per cent. Perpetual Additional Tier 1 Notes and CHF 100 million 1.00 per cent. Tier 2 Notes due 2027 (collectively, the Notes). The Notes are governed by Swiss law, eligible to count towards SGKB’s Swiss going concern requirement, and exempted from the Swiss withholding tax regime. They will be listed on the SIX Swiss Exchange. Zürcher Kantonalbank acted as Sole Structuring Advisor and Lead Manager on the transaction.

Dufry CHF 3.4 billion refinancing

On 3 November 2017, the Dufry group concluded the refinancing of its main bank credit facilities of CHF 3.4 billion. The refinancing of the bank credit facilities concluded the restructuring of Dufry’s financing structure, including the issuance of the EUR 800 million Senior Notes on 24 October 2017.

ADC Therapeutics SA USD 200 million private placement

On 23 October 2017, ADC Therapeutics SA, an oncology drug discovery and development company that specializes in the development of Antibody Drug Conjugates (ADCs) targeting major cancers, announced that it has raised USD 200 m through a private placement of shares. According to BioWorld.com, the placement is the fourth largest private financing round on record for a European biopharmaceutical firm and the second largest private equity round in European biopharma so far in 2017.