The Slovenia Times

Maiden retail bond issue proves successful

Euro bank notes. Photo: dpa/STA

Three-year bonds offered by the Slovenian treasury to domestic retail investors have attracted subscriptions in excess of €258 million. Despite initially planning a €250 million issue, the treasury will meet the demand.

Finance Minister Klemen Boštjančič said that a total of 9,427 individuals subscribed for the bonds between 1 and 16 February. The annual coupon rate of the bonds is 3.4%.

To maintain liquidity on the Ljubljana Stock Exchange and in deals off the stock exchange, the bank NKBM, the liquidity provider of government bonds, will be allocated bonds in an additional amount of 1% of the issue.

The government will thus issue €261 million worth of bonds on 23 January, Boštjančič announced at a press conference on 19 February, adding that this would be the amount available to investors.

Nearly 5,660 new trading accounts were opened, which Boštjančič said "shows that citizens have recognised the alternative to other investments".

The government decided to issue the first people's bond after the devastating 2023 floods to secure liquidity for its needs.

It also wanted to encourage the development of the domestic capital market and improve financial literacy of the population.

"We've achieved one of the key goals that I've repeatedly highlighted, which is to encourage interest in the capital market."

Boštjančič, who subscribed for the issue himself, would like the investors who opened trading accounts now to remain active on the capital market.

"At the Finance Ministry, we'll work on its development through other, longer-term measures," he said.

However, a decision on another retail bond has not yet been made. "We'll wait for the results of this subscription, and then make further decisions, also depending on interest rate developments."

The minister highlighted another similar financial instrument small investors could soon invest in - treasury bills, whose next subscription is planned in March and April. Last year, retail investors bought €212 million worth of treasury bills.

Individuals aged at least 18 with a permanent or temporary residence were eligible to subscribe for at least €1,000 and not more than €100,000 worth of bonds.

Once the bond is listed on the Ljubljana Stock Exchange, anyone will be able to buy it.

The latest central bank data shows that Slovenian households have some €29 billion in bank deposits where interest rates are generally below this bond yield.


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