Slovenia Issues €2 Billion New Debt

By , 06 Jan 2021, 12:02 PM Business
Slovenia Issues €2 Billion New Debt JL Flanner

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STA, 5 January 2020 - Slovenia has issued a new ten-year bond to the tune of EUR 1.75 billion and extended the existing 30-year bond issue by another EUR 250 million, the newspaper Finance has reported, adding that the coupon rate for the 10-year bond is negative for the first time ever.

The news follows an announcement by the Finance Ministry on Monday that it had commissioned the banks Barclays, BNP Paribas, Credit Agricole CIB, Deutsche Bank, HSBC and NKBM to manage the issue of a new bond due in 2031 and the increase of the bond due in 2050.

Finance cites Bloomberg in reporting that demand for the ten-year bond exceeded EUR 10.6 billion and the coupon rate was 17 basis points above the mean value of the 10-year swap rate of -0.27%, which means the borrowing comes at a negative coupon rate.

Slovenia also issued an additional EUR 250 million in existing 30-year bonds with a maturity due in 2050. The demand exceeded EUR 250 million. The coupon rate was 40 basis points above the median value of the 30-year swap rate of -0.02%. This means the sovereign borrowed at an interest rate of 0.38%, according to Finance.

Slovenia most recently tapped into international financial markets in October 2020. Finance at the time reported that the treasury took out roughly EUR 6 billion in fresh borrowing through various new and expanded bonds, not including treasury bills.

The bulk of the borrowing was needed to finance relief and stimulus measures amid the Covid-19 pandemic.

To implement this year's state budget, the country would need to borrow EUR 5.67 billion, under the budget financing programme adopted by the government last month.

Public debt would thus increase to EUR 36.62 billion, or 75% of the country's GDP.

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