The Slovenia Times

Ministry Warns Bond Yields Up After Referenda Motions


"Investors expect that Slovenia will push ahead credibly with the implementation of the reforms outlined in October and measures for stabilising banks and managing state assets," the ministry said.

It pointed out that the negative effects of the referenda motions were reflected in an 0.5 percentage point jump (to 5.6%) in the yield for dollar-denominated bonds on Wednesday.

An 0.5 point increase in the interest rate makes for EUR 8.6m in extra borrowing costs a year. "The price of borrowing for Slovenia has therefore increased following the motions for referenda, especially when compared to other comparable countries."

The ministry stressed that as part of a roadshow that accompanied the recent dollar-denominated bond issue, Slovenia was able to see its bond yields fall mostly with the help of the laws in question.

"International financial markets, which are an important source of financing for Slovenia, the Slovenian banking system and business, expect the implementation of the planned measures for shoring up the stability of banking sector and managing state assets. Quick implementation of these measures is needed to prevent a further worsening of the situation in the Slovenian economy and public finances."

Meanwhile, the yield on Slovenian euro bonds has not changed significantly on Friday on the MTS electronic market, standing at 5.61%, unchanged from Thursday's closing levels.


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