Slovenia issues EUR 1bn bond securing 2.4% yield

Slovenia issues EUR 1bn bond securing 2.4% yield


Review Hari Stefanatos

Slovenian Finance Ministry, in a statement issued yesterday evening, confirmed that the country issued a EUR 1 billion bond on Tuesday securing a yield of just under 2.4%.

The ministry confirmed orders of EUR 3.2bn for the bonds carrying an annual coupon rate of 2.25%. With the issue price at 99.095%, the bond secured a spread of 160 basis points compared to mid-swaps.

This is the second time in 2014 that Slovenia has addressed the band markets looking for funds, after it issued EUR 2bn in 3.5- and seven-year bonds in early April, with the seven-year bond having been sold at a rate of 3%.

The ministry hailed the oversubscription of today’s issue as a show of confidence in measures carried out by the country to stabilise its banking system and push ahead with structural reforms.

It also explained that the unscheduled borrowing was necessary to finance the 2015 and 2016 budget needs. In addition, the government is expected to bring a supplementary budget this year and is planning a revision of next year’s budget, to cover the rise in the deficit from EUR 1bn in the original budget to EUR 1.2bn for 2014.

In the supplementary budget for 2015 the government is seeking to lower the budget deficit to below 3% of GDP, in line with promises given to the European Commission.

The issue was managed by Barclays, Credit Agricole CIB, Deutsche Bank and J.P. Morgan and saw the participation of 275 investors.

Asset managers represented the biggest buyers, acquiring 54% of the issue. Hedge funds bought 18%, banks 15%, insurance and pension funds 8% and central banks 5%.

(Source: Sloveniatimes)