In a context of negative rates in CHF, few Swiss franc bonds are still attractive. Among these, we must mention the perpetual subordinated bonds of Air France-KLM. With a fixed coupon of 5.75%, the bonds are quoted at par and are relatively stable since 2014. In February / March 2016 were down to 92%, but they didn't stay at those levels for long. Although the bond is not rated by rating agencies, Air France-KLM can be considered a quasi-sovereign bond in terms of credit risk and in this case, being subordinated is not a concern. The bond may be repaid in 2021, but that date is far away. What matters more is that this bond gives a yield of 5.75% in CHF on a company whose main shareholder is France and that has a strategic importance for both France and Holland.

Warning: volatile security that is not suitable for risk-averse investors.

This is not a recommendation but just our opinion. Please consult with your financial advisor before investing!

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