Slovenia issued its first inflation-indexed bond on 4 September. Worth €100 million, the bond has a real coupon of 0.825% and matures in 2034. At the same time, an interest rate swap was concluded for the purpose of balancing the interest rate risk stemming from inflation at a fixed interest rate of 3.5%, the Finance Ministry said.

"With this issue we have laid the foundation for the development of a new bond market and opened the door to a wider range of investors. With the bond, we are diversifying the financing instruments of the state budget and addressing investors who invest in this type of debt instruments," the ministry said.

In issuing its first bond with the principal linked to the harmonised index of consumer prices for the eurozone, Slovenia has joined a group of developed countries that have already issued such bonds based on the Canadian model.

Slovenia will not be exposed to inflation risk as a result of such a bond, as an interest rate swap has also been concluded for the purpose of managing interest rate risk related to inflation at a fixed interest rate of 3.5%, the ministry said.

The bond will be listed on the Ljubljana and Luxembourg stock exchanges.