Slovenian Bond Yield Retreats Below 6%


Data from the MTS electronic exchange put the yield on Slovenian bonds at 5.95% at 12.30 PM CET, down 14 basis points on the opening value.

The yield represents a 4.24 point spread on the benchmark 10-year German bonds, whose yield stands at 1.71%.

While investors demanded a yield of around 5% on Slovenian bonds in March, this spiked after Cyprus was bailed out in late March and speculation grew that Slovenia would be the next in line to require international financial aid.

In April, the yield on Slovenian bonds briefly surpassed the 7% rate widely viewed as representing the last still sustainable level of interest for borrowing.

Since then it has only briefly fallen to below 6%, but always rebounded back above the mark.

Yield on Slovenian debt papers has gradually be dropping in recent weeks following positive assessments of Slovenia's efforts to tackle its excessive budget deficit and implement structural reforms by the European Commission.