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Tolar denominated government securities
will be redenominated to Euro using the
bottom up method. The method chosen converts
a single note into Euro, using the SIT/Euro
fixed conversion rate (i.e. 239,64 SIT
for 1 Euro) and rounding to the nearest
cent.
Euro denominated fixed rate government
bonds
There are several bonds in the government
securities portfolio which are denominated
in EUR, but payments are effected in SIT
countervalue. This type of bonds will
not need to be redenominated. From January
1, 2007 all payments of these bonds wil
be calculated and effected in Euro.
On December 31, 2006, the following eurodenominated
bonds with fixed rate of interest will
be outstanding: RS4, RS18, RS23, RS26,
RS29, RS32, RS33, RS38, RS48, RS49, RS50
in RS53.
The nominal value of these bonds is 100
EUR except for RS4 which has the nominal
value of 511,29 EUR and RS49 which has
the nominal value of 380 EUR.
SIT denominated fixed rate government
bonds
Nominal value of the bond is paid in a
lump sum on the day of amortization of
the bond. On December 31, 2006, the following
fixed rate SIT bonds will be outstanding:
RS44, RS52, RS54, RS55, RS56, RS57, RS58,
RS59, RS60, RS61 in RS62. The denomination
of these bonds is 10.000 SIT.
On Conversion day, the value of a single
bond in Euro is established using the redenomination
method as described above. From January
1, 2007 onwards this value (i.e. EUR 41,73)
will be the new nominal value of the bond
and the basis for caluculation of interests
according to the terms and conditions of
the bond.
(TOM) Indexed instruments
are instruments where the nominal value
of the bond is being revalued for the
current annual TOM rate (base interest
rate equal to preceeding 12 months average
inflation). The nominal value of the
bond is revalued using the compound calculation
method, i.e. by multiplying the nominal
value of the bond with revaluation factors,
calculated monthly on the basis of TOM
rate. These instruments have a fixed
rate of interest. The revalued principal
of the bond is paid in a lump sum on
the day of maturity. On December 31,
2006, two bonds of this type will be
outstanding: RS46 and RS47.
On Conversion day, nominal SIT value (10.000
SIT) of each such note will be redenominated
in Euro using the redenomination principle
as described above (EUR 41,73). At the
time of each interest payment this Euro
redenominated value will be revalued as
described in the preceeding paragraph and
the interest will be calculated on such
value of the bond and paid in Euro. On
the due date of principal of the bond the
bond will be repaid in the revalued nominal
value calculated on the repayment date
as described in the previous paragraph.
Variable rate instruments
are government securities with variable
rate of interest which consists of current
annual base rate of interest and a fixed
interest margin. (TOM + X%). The greater
part of these bonds will be amortized
before Euro introduction. However, on
December 31, 2006, three bonds remain
unamortized (outstanding): RS21, RS31
in RS39.
On Conversion day, value of a the RS31
bond in Euro is established using the redenomination
principle as described above. From January
1, 2007 onwards this value (i.e. 41,73
EUR) will be the new nominal value of the
note and the basis for caluculation of
interests according to the terms and conditons
of the bond.
On Conversion day, the value of outstanding
instalments of principal of RS21 and RS39
amortizing bonds in Euro is established
using the fixed conversion rate rounding
to one cent.. The difference between total
value of the redenominated outstanding
principal and the sum of redenominated
outstanding instalments will be added to
the first instalment to be paid after December
31, 2006.
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