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NEWS

Republic of Slovenia priced a $3.5 bn 10- and 5-year bond

Ljubljana, 11 February 2014 - The Republic of Slovenia, acting through the Ministry of Finance, rated Ba1/A-/BBB+ (Moody’s/ Standard & Poor’s/Fitch, stable/stable/negative), has successfully priced a USD 3.5bn dual tranche benchmark offering. The USD 1.5bn 5-year was priced at a yield of 4.275% (UST+280bps), while the USD 2bn 10-year tranche was priced at 5.480% (UST +280bps), both well inside the UST +287.5bps area guidance and +300-312.5bps “Initial Pricing Thoughts” level.

Barclays, Goldman Sachs International, and J.P. Morgan acted as Joint Bookrunners on the transaction.

 

Slovenia announced a deal related Roadshow on 16 January to update the global investor community on its credit story and significant progress made towards bank recapitalisations. Starting on Tuesday 21 January, the Republic conducted a series of investor meetings in the US, covering New York, Boston, Los Angeles and San Francisco. In addition, in the subsequent week the delegation spent two days in London to meet with key accounts. Based on very strong feedback from investors, and taking advantage of relatively stable market conditions, Slovenia announced a new dual 5- and 10-year tranche USD benchmark issue on Monday 10 February 2014 at 9.20am GMT, with initial price guidance of UST’s +300-312.5bps area for both the 5- and 10-year tranches.

 

The transaction was met with immediate interest, driven initially by large real money investor participation from Europe. After a few hours of book building, orders had reached over USD 12bn allowing Slovenia to tighten the spread guidance to UST +287.5bpss area on both lines. As interest from accounts continued throughout the US morning, final pricing was set at UST +280bps for both tenors, representing a negative “New Issue Premium” versus the Republic’s interpolated secondary curve. The offering garnered a combined orderbook in excess of USD 16bn, despite the significant tightening of re-offer levels, which is the largest orderbook for a CEEMEA sovereign syndication in 2014 to date. 

  

Final terms of the transaction:

 

Issuer:

The Republic of Slovenia

Rating:

Ba1/A-/BBB+ (stb/stb/neg)

Format:

144A / Reg S

Denominations:

USD 200k + 1k

Law/Listing:

English / Luxembourg Stock Exchange

Lead Managers:

Barclays, Goldman Sachs International, J.P. Morgan

Tranches:

5-years

10-years

Maturity:

18 February 2019

18 February 2024

Size

$1.5bn

$2.0bn

Re-offer price:

99.331%

98.247%

Yield (s/a)

4.275%

5.480%

Coupon (s/a):

4.125%

5.250%

Spread to UST:

T+280.0bps

T+280.0bps

  

Final distribution statistics (based on allocations):

 

5-year tranche:

Book size $9.3bn, 377 investors

10-year tranche:

Book size $7.1bn, 304 investors

US

54%

US

68%

UK

32%

UK

22%

Europe

13%

Europe

8%

Other

1%

Other

2%

Fund Managers

87%

Fund Managers

89%

Insurance / Pension Funds

4%

Insurance / Pension Funds

4%

Banks / Private Banks

5%

Banks / Private Banks

4%

Central Banks

3%

Central Banks

1%

Other

1%

Other

 2%

 

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