The Slovenia Times

People's bond subscription starts

Euro banknotes. Photo: Kaja Šoštarec/STA
The Slovenian treasury has opened subscriptions for a €250 million, three-year bond with an annual interest of 3.4% reserved for domestic retail investors, in a bid to provide a boost to the domestic capital market.

Individuals aged at least 18 with a permanent or temporary residence in Slovenia are eligible to subscribe at nearly 250 bank and brokerage branches across the country.

The minimum investment has been set at €1,000 and the maximum at €100,000. Subscription ends on 16 February.

Once the security, popularly known as a people's bond, is listed on the Ljubljana Stock Exchange, it will be freely transferable and there will no longer be any restrictions on trading volumes.

According to the latest central bank data, Slovenian households have around €29 billion in bank deposits and banks are where most people save.

But despite a recent rise in interest rates, interest on deposits remains low and far below the eurozone average, making the bond an attractive proposition.

To sweeten the deal, capital gains tax will be waived on earnings of up to €1,000.

The treasury did not necessarily have to borrow on the domestic market and indeed a recent €1.5 billion issue on the international market was cheaper, with an interest rate of just over 3%.

However, the government wants to jolt the sleepy Slovenian capital market into action and get retail investors to start considering securities as a viable investment option.

"We are offering an alternative. We want to improve financial literacy and promote permanent rather than just occasional participation of individuals in such instruments," Finance Minister Klemen Boštjančič said.


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