Slovenia to issue domestic retail bond
Slovenia will issue a government bond that will be offered to domestic retail investors in early February. The Finance Ministry plans to issue €250 million worth of papers with a maturity of three years.
Individuals with permanent or temporary residence in Slovenia will be able to invest between a minimum of 1,000 and a maximum of 100,000 euros, the ministry announced on 11 January.
The yield will be set before the notice of invitation to subscribe is issued, based on the curve of the yield on treasury bills with the addition of an expected new issue premium.
If demand exceeds supply, individuals may get fewer bonds than they subscribed for, but the value will not be lower than €1,000.
By focusing on domestic retail investors, the Finance Ministry says it is seeking to improve citizens' investment skills and revive Slovenia's underdeveloped capital market. The ministry also hopes to encourage residents to participate in debt instruments of this kind.
Data from the central bank shows that Slovenian households had a total of €26.2 billion in savings on their bank accounts as of October 2023.
As part of preparations for the issue, the government laid down in the Reconstruction and Development Act, passed in December, that retail investors in government bonds and treasury bills issued in 2024, 2025 and 2026 have their interest taxed at the same rate as bank deposits, meaning interest income under €1,000 will not be taxed.
The online portal Finance reported that the subscription will take place between 1 and 16 February. The banks NLB and NKBM are to be the main organisers of the subscription, but investors will also be able to subscribe through other market traders. The investors will need a trading account at a brokerage firm.
The government planned to issue such a bond last year, but decided to postpone it. The ministry said this had happened due to new circumstances regarding GDP estimates, as well as EU recovery and resilience funds coming in, among other things.
The issue will come nearly a year after Croatia issued a government bond for retail investors with a yield of 3.65% to raise €1.3 billion. This was followed by an issue of treasury bills that brought in another €1.1 billion.
Finance noted that Croatian investors did not need a trading account and that their income from interest on the papers is not taxed.