The Slovenia Times

Yield on Slovenian Bonds Climbs to Just Below 5%


The yield for the Slovenian bond was 4.99% at the close of trading on the MTS exchange, 0.16 percentage points above the opening value.

This is after the implicit interest rate on Slovenia's long-term debt briefly topped 5% at around 1 PM on Tuesday for the first time this year.

The yield spread over the German bonds, a benchmark, rose to 349 basis points today.

The yield on Slovenian debt fell below 5% at the beginning of the year and then kept falling.

Part of the reason was the general stabilisation in the eurozone, and part the removal of blockade to some of the key reform measures of the Slovenian government, including a bad bank and a pensions system overhaul.

But the yield started ticking up again due a political crisis provoked by a report by the country's anti-graft watchdog alleging that PM Janez Janša and opposition leader Zoran Janković violated anti-corruption legislation.

According to the business daily Finance, the latest rise comes after analysts of Unicredit Research in London drew attention to the political turmoil in Slovenia this morning.

"The escalation of the political crisis impacts negatively on Slovenian's long-term bonds," Finance cited Carlos Ortiz, economist at the London subsidiary of Unicredit bank. The "punishment" is seen as temporary; once the political uncertainty is over, the yield is expected to start dropping again.

The MTS exchange today also saw an increase in the yields on ten-year bonds of some other vulnerable European economies.


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