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NEWS

Tender, exchange and reopening of notes of Republic of Slovenia

Ljubljana, 28 February 2018 - On Tuesday 20th of February, the Republic of Slovenia (the “Republic”) rated Baa1 (stable) /A+ (stable) /A- (stable) (Moody’s/S&P/Fitch) announced a modified Dutch auction (“MDA”), offering options to purchase for cash or exchange for new 5.25% Notes due 2024, to be consolidated with the outstanding 5.25% Notes due 2024. The tender targeted the Republic’s US$ 452.140m 5.500% Notes due 2022, US$ 293.358m 5.850% Notes due 2023 and US$ 1,368.381m 5.25% Notes due 2024, while the exchange targeted the 2022 and 2023 Notes into new 2024 Notes (the “Notes”). The same notes were also tendered in May 2016, Aug 2016, Oct 2016, Mar 2017 and May 2017. In September 2017 only the 2022 and 2023 Noted were tendered, but same exchange exercise was done as for this transaction. At the same time, the Republic announced a potential EUR new issue to follow subject to market conditions. The offer was announced as part of the Republic’s effective debt management strategy aimed at providing liquidity to accepted holders.

As at the Expiration Deadline of 17:00 CET on 27th of February 2018, the Republic received valid tenders for purchase of US$ 975.5m in aggregate nominal amount of Notes. In line with its effective government debt management objective, the Republic purchased US$ 459.8m in aggregate nominal amount of the Notes (the “Final Acceptance Amount”).  No scaling factor was applied for the 2022 and 2023 Notes, but some scaling was applied for the 2024 Notes given USD1.25bn min size objective set for these Notes. The Notes were purchased on a Non-Competitive basis only i.e. at the relevant Maximum Purchase Spread representing successful price and size outcome for the Republic.

Furthermore, the Republic received valid exchange offers of US$ 122.6m in aggregate nominal amount of Notes. In line with its effective government debt management objective, the Republic purchased US$ 112.6m in aggregate nominal amount of the Notes (the “Final Acceptance Amount”).  No scaling factor was applied. The Notes were purchased on a Non-Competitive basis only i.e. at the relevant Maximum Purchase Spread representing successful price and size outcome for the Republic. After applying the relevant exchange ratios, US$ 114.2m of new 2024 Notes were issued.

Notes in question:

US$ 459,834,000 Tender of Outstanding US$ 452,140,000 5.500% Notes due 2022,
US$ 293,358,000 5.850% Notes due 2023 and US$ 1,368,381,000 5.250% Notes due 2024

US$ 112,559,000 Exchange of Outstanding US$ 452,140,000 5.500% Notes due 2022 and
US$ 293,358,000 5.850% Notes due 2023 for 5.250% Notes due 2024

EUR 850mm Reopening of the Outstanding 1.000% Notes due 2028 (ISIN: SI0002103677),
EUR 250mm Reopening of the Outstanding 1.500% Notes due 2035 (ISIN: SI0002103487) and
EUR 150mm Reopening of the Outstanding 3.125% Notes due 2045 (ISIN: SI0002103552)

TENDER OFFER TERMS AND RESULTS

 

Clearing Spread

Reference U.S. Treasury Rate

Purchase Yield

Purchase Price

Tender Series Acceptance Amount

Notes Accrued Interest

2022 Notes

40bps

2.658%

3.058%

110.477%

U.S.$135,277,000

2.001%

2023 Notes

45bps

2.658%

3.108%

113.009%

U.S.$91,985,000

1.901%

2024 Notes

55bps

2.658%

3.208%

110.974%

U.S.$232,558,000

0.277%

EXCHANGE OFFER TERMS AND RESULTS

 

Clearing Spread

Reference U.S. Treasury Rate

Purchase Yield

Purchase Price

Exchange Series Acceptance Amount

Exchange Ratio

Net Accrued Interest

2022 Notes

40bps

2.658%

3.058%

110.477%

U.S.$44,353,000

100.065214%

1.724%

2023 Notes

45bps

2.658%

3.108%

113.009%

U.S.$68,206,000

102.358589%

1.618%

2024 Notes

 

 

 

 

 

 

New 2024 Notes Spread

Refernce U.S. Treasury Rate

New 2024 Notes Yield

New 2024 Notes Price

Nominal Amount of New 2024 Notes

2024 Notes

65bps

2.658%

3.308%

110.405%

U.S.$ 114,177,000

On Tuesday 27th of February 2018, the Republic announced the mandate for increases of the outstanding 1.000% notes due 6 March 2028, the outstanding 1.500% notes due 25 March 2035, and the outstanding 3.125% notes due 7 August 2045 Regulation S transactions in dematerialized registered form.

On the back of supportive market conditions, initial price guidance was announced on Wednesday 28th of February at approximately 9:30 CET at mid-swaps + 30bps area for reopening of March 2028 notes, mid-swaps + 50bps area for reopening of March 2035 notes and mid-swaps + 55bps area for reopening of August 2045 notes. The orderbooks grew steadily, reaching a combined  size in excess of EUR 3bn (incl. EUR725m of Joint Lead Manager interest), which allowed the Republic to release revised price guidance at mid-swaps +27bps area for March 2028 notes, mid-swaps +47bps area for March 2035 notes and mid-swaps +55bps area for August 2045 notes at approximately 11:30 CET. Final spreads were set at approximately 12:40 CET with a spread of mid-swaps +25bps for March 2028 notes, mid-swaps +45bps for March 2035 notes and mid-swaps +55bps for August 2045 notes. The books closed at 13:00CET and the size on these notes were set at around 14:00CET at launch of the deal at a size of EUR 850m for March 2028 notes, a size of EUR 250m for March 2035 notes, and a size of EUR 150m for August 2045 notes. At this point we have seen books in excess of EUR3.7bn.

The transaction was successfully priced just before 17:00 CET with total combined demand at over EUR 3.7bn including EUR 725m Joint Lead Manager interest.

This deal marked the Republic’s seventh consecutive successful USD tender offer funded by EUR new issuance and allowed Slovenia to achieve its strategic goals of extending the overall duration of its debt stockpile and increasing the liquidity of its outstanding bonds at attractive all-in yields.

The above transactions follow the successful US$ 334m tender offer, US$ 523m exchange offer, EUR 200m increase of March 2027 notes and EUR 500m increase of November 2040 notes that the Republic executed in September 2017.

Barclays, Deutsche Bank, Goldman Sachs International Bank, HSBC and J.P. Morgan jointly led the tender offer and reopening transactions.

REPUBLIC OF SLOVENIA EUR 850M REOPENING OF THE OUTSTANDING 1.000% NOTES DUE 2028, EUR 250M REOPENING OF THE OUTSTANDING 1.500% NOTES DUE 2035, AND
EUR 150M REOPENING OF THE OUTSTANDING 3.125% NOTES DUE 2045:

FINAL TERMS

Issuer Rating:

 

Baa1 (stable) / A+ (stable) / A- (stable)

Pricing Date:

 

28 February 2018

Settlement Date:

 

7 March 2018

Transaction

 

Reopening of
March 2028 Notes

Reopening of
March 2035 Notes

Reopening of
August 2045 Notes

Amount Outstanding

 

EUR 1,500,000,000

EUR 2,000,000,000

EUR 1,000,000,000

Increase Amount

 

EUR 850,000,000

EUR 250,000,000

EUR 150,000,000

Maturity Date:

 

06 March 2028

25 March 2035

07 August 2045

Next Coupon Date:

 

06 March 2019

25 March 2018

07 August 2018

Annual Coupon:

 

1.000%

1.500%

3.125%

Re-offer Price:

 

96.861%

93.553%

119.894%

Re-offer Spread vs. Mid-Swaps:

 

25bps

45bps

55bps

Re-offer Yield:

 

1.337%

1.948%

2.156%

Government Benchmark:

 

DBR 0.500% Feb 2028

DBR 4.750% Jul 2034

DBR 2.500% Aug 2046

Re-offer Spread vs. Benchmark:

 

67.7bps

97.3bps

88.6bps

ISIN:

 

SI0002103776

SI0002103487

SI0002103552

Joint Lead Managers:

 

Barclays, Deutsche Bank, Goldman Sachs International Bank, HSBC and J.P. Morgan

 

IMPORTANT NOTICE:

THE INFORMATION HEREIN IS INDICATIVE ONLY. ALTHOUGH THE INFORMATION HEREIN IS REFLECTIVE OF THE TERMS OF THE SECURITIES CONTEMPLATED AS OF THE TIME OF THIS COMMUNICATION, THERE IS NO ASSURANCE THAT THE SECURITIES WILL ACTUALLY BE ISSUED. THE SECURITIES WILL BE ISSUED ON THE BASIS OF FINAL TERMS AND CONDITIONS THAT ARE EXPECTED TO BE DELIVERED TO INVESTORS PRIOR TO OR UPON SETTLEMENT. BEFORE MAKING ANY INVESTMENT DECISION AND ENTERING INTO ANY TRANSACTION IN RELATION TO THE SECURITIES, INVESTORS SHOULD TAKE STEPS TO ENSURE THAT THEY UNDERSTAND THE TRANSACTION AND HAVE MADE AN INDEPENDENT ASSESSMENT OF THE APPROPRIATENESS OF THE TRANSACTION IN THE LIGHT OF THEIR OWN OBJECTIVES. INVESTORS SHOULD MAKE SURE THAT THEY HAVE SUFFICIENT INFORMATION AVAILABLE IN RELATION TO THE REPUBLIC OF SLOVENIA BEFORE MAKING AN INVESTMENT IN THE SECURITIES. ANY DECISION TO PURCHASE ANY OF THE SECURITIES SHOULD ONLY BE MADE ON THE BASIS OF AN INDEPENDENT REVIEW BY A PROSPECTIVE INVESTOR OF THE ISSUER’S PUBLICLY AVAILABLE INFORMATION. NEITHER THE JOINT LEAD MANAGERS NOR ANY OF THEIR RESPECTIVE AFFILIATES ACCEPT ANY LIABILITY ARISING FROM THE USE OF, OR MAKE ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS DOCUMENT OR THE ISSUER’S PUBLICLY AVAILABLE INFORMATION. THE INFORMATION CONTAINED IN THIS DOCUMENT IS SUBJECT TO CHANGE WITHOUT NOTICE.

NEITHER THIS ANNOUNCEMENT NOR ANY COPY OF IT MAY BE TAKEN OR TRANSMITTED, DIRECTLY OR INDIRECTLY, INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE NOR SHALL IT (OR ANY PART OF IT) OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT THEREFORE. THE OFFER AND THE DISTRIBUTION OF THIS ANNOUNCEMENT AND OTHER INFORMATION IN CONNECTION WITH THE OFFER IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW AND PERSONS INTO WHOSE POSSESSION ANY DOCUMENT OR OTHER INFORMATION REFERRED TO HEREIN COMES SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH RESTRICTION. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OF ANY SECURITIES IN THE UNITED STATES. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933. THE ISSUER HAS NOT REGISTERED AND DOES NOT INTEND TO REGISTER ANY PORTION OF ANY OFFERING IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF ANY SECURITIES IN THE UNITED STATES AND WOULD ONLY DO SO BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER THAT WOULD CONTAIN DETAILED INFORMATION ABOUT THE REPUBLIC OF SLOVENIA. THIS ANNOUNCEMENT IS ADDRESSED TO AND DIRECTED AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA THAT HAVE IMPLEMENTED DIRECTIVE 2003/71/EC, AS AMENDED (THE "PROSPECTUS DIRECTIVE") WHO ARE ''QUALIFIED INVESTORS'' WITHIN THE MEANING OF ARTICLE 2(1)(2) OF THE PROSPECTUS DIRECTIVE. IN ADDITION, THIS ANNOUNCEMENT IS DIRECTED SOLELY AT (I) PERSONS OUTSIDE THE UNITED KINGDOM; OR (II) "INVESTMENT PROFESSIONALS", AS SUCH TERM IS DEFINED IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE ''ORDER''); OR (III) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (''HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC'') OF THE ORDER; OR (IV) ANY OTHER PERSON TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED BY VIRTUE OF AN EXEMPTION TO SECTION 21(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 OR OTHERWISE IN CIRCUMSTANCES WHERE IT DOES NOT APPLY (ALL SUCH PERSONS IN (I)-(IV) ABOVE BEING ''RELEVANT PERSONS'').  ANY INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES WILL ONLY BE AVAILABLE TO AND WILL ONLY BE ENGAGED WITH RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT ON THIS ANNOUNCEMENT.

A SECURITIES RATING IS NOT A RECOMMENDATION TO BUY, SELL OR HOLD SECURITIES AND MAY BE SUBJECT TO REVISION OR WITHDRAWAL AT ANY TIME.

PUBLIC RELATIONS OFFICE