Published: October 22, 2012
Sovereign prices first dollar issuance since 1996.
The Republic of Slovenia could revisit the dollar bond market as soon as next year after completing its first issuance since 1996, its State Secretary of the Ministry of Finance has told EMEA Finance.
Last Friday the government issued a US$2.25bn 10-year bond, its first benchmark transaction denominated in US dollars in 16 years. The order book for the bond, which has a yield of 5.5%, closed at US$11bn in just 12 hours, the largest demand for a dollar sovereign bond in Central and Eastern Europe or the European Union this year.
That allowed the sovereign to tighten the pricing and increase the deal size to its maximum capacity. The sovereign has swapped the proceeds back to euros, which it notes has given it better priced funding than a comparable euro transaction.
Speaking to EMEA Finance following the deal, Dr. Dejan Krušec, State Secretary of the Ministry of Finance, said that demand for the new paper means the republic could revisit the market soon.
“Because of the high demand, some investors were not able to enter into our US bond, so they are now starting to buy our bonds in the secondary market in the euro area, which has led to a tightening [of the yield],” he said.
“If developments continue like this, we don’t exclude an issue in euros this year, and we also said to investors that this isn’t our last issue in dollars – given our relatively high refinancing need for next year, there is a possibility that we will also re-issue in the dollar market next year. We’ll leave both options open.”
The eurobond deal followed an investor roadshow across the US and UK earlier in the month. BNP Paribas, Deutsche Bank and JP Morgan acted as lead managers.