Slovenia bond sales

Slovenia returns to the debt market with €1.75bn bond issue

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Slovenia continues the tradition of tapping international debt markets very early in the year. The Southeastern European country completed a dual-tranche bond issue on Wednesday (Jan. 6) raising a total of 1.75 billion euros ($1.98 billion).

Bookrunner banks were Barclays, BNP Paribas, Commerzbank, Deutsche Bank, Goldman Sachs Bank Europe SE and J.P. Morgan.

In the first leg of the deal, EUR1.25 billion in February 2026-dated bonds was sold with the spread set 21 basis points below mid-rate swaps, the lowest in Slovenia’s history, the finance ministry noted.

Final books exceeded EUR5 billion, excluding demand from the joint lead managers, said one of the bookrunner banks. This tranche was priced at 100.991, at a yield of -0.241%.

In the second leg of the deal, EUR500 million was sold in February 2062-dated bonds, with the spread set 75 basis points above mid-swaps. Final books were above EUR1.6 billion, also excluding demand from the joint lead managers. This tranche was priced at 99.745, at a yield of 1.183%.

Slovenia Bonds
(Source: Cbonds)

Last month, Slovenia announced it was seeking to borrow 5.05 billion euros ($5.69 billion) in 2022 for financing budgetary needs.

“Key borrowing instruments will be bonds and treasury bills,” the government had said.

Besides financing the budgetary expenditures Slovenia needs to finance maturing debt worth some 2.3 billion euros. The deficit planned for 2022 amounts to 4.6% of gross domestic product.

Also on Wednesday, Italy launched a new 30-year bond maturing on Sept. 1, 2052 and received more than 55 billion euros of demand. The Italian government launched the euro zone’s first major debt sale of the year just weeks before parliament convenes to elect a new president on Jan. 24.

Barclays, BNP Paribas, Deutsche Bank, Intesa Sanpaolo and JP Morgan managed the sale.

UBS expects net supply of 112 billion euros this year from the 10 biggest euro area issuers, compared to minus 203 billion in 2021, the largest year-on-year increase in net supply since the ECB launched quantitative easing in 2015.