The Slovenia Times

Slovenia Issues 20-Year Bond at 1.55% Rate


The issue, which was slightly over-subscribed, was mostly bought by fund managers, banks and insurance companies.

"The successful issue reflects investors' trust in measures carried out in Slovenia, as evident from the lowest yield to maturity in history," the ministry said.

Matej Šimnic, an analyst with Alta Invest, described the issue as a success, as the rate is only 20-30 basis points above the 10-year Spanish and Italian benchmarks.

But he was quick to note that the favourable terms were largely due to the European Central Bank's quantitative easing programme, which has driven down rates across the eurozone.

"This is why the government may not delay structural reforms and public sector cost-cuts," he told the STA.

The issue was expected given that the government recently tweaked the budget financing programme for this year.

It decided the treasury would borrow almost EUR 900m to finance current spending given that the deficit widened compared to the original budget and principal payments are higher than originally planned.

The treasury can additionally borrow to pre-finance spending for the coming years. The borrowing cap is set at EUR 6.45bn.

The last time the treasury issued bonds was in October 2014, when it completed a EUR 1bn issue of ten-year bonds at a coupon rate of 2.25%.


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