The spread on the German bonds, the eurozone benchmark, was at 456 basis points.

While the immediate cause of the substantial decline in the yield is not clear, the trend started on Wednesday, following the news the night before that coatings maker Helios was going to be sold to Austria's Ring International.

The deal was made official on Wednesday and had been hailed as a signal that Slovenian government was serious about its privatisation plans. Helios was on the list of 15 companies planned for privatisation.

The bond yield hovered at around 5% in mid-March, but then started ticking up following Cyprus's request for a bailout to briefly exceed 7% in April, fuelled by speculation Slovenia would be the next in line.

The yield on Slovenian bonds then fell in early May after the country successfully completed a US$ 2.5bn ten-year bond issue and US$ 1bn five-year bond issue.

After another peak in late June, the bond yield had been hovering at around 6.8% in the autumn as speculation increased again about the possibility of Slovenia asking for aid to bail out its banks.