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Slovenia successfully priced a new 30 year issuance

On the 13th of October 2020, the Republic of Slovenia successfully priced a new €1bn 30 year issuance, shortly after receiving a credit rating update from Moody’s.

The transaction priced at 17:13 CET at a re-offer price of 99.847%. This represented a reoffer yield of 0.493% at the time of pricing.

On the back of constructive market conditions, despite again rising Covid-19 cases in Europe, Slovenia announced a Tender Offer in combination with a new EUR offering on Monday 5th of October at 11:30 CET. With the cash tender offer the Republic was targeting its €1.6bn 4.375% Jan-21 notes and its €1bn 3.000% Apr-21 notes. The tender offer was conducted via a Modified Dutch Auction procedure, with the maximum purchase yield set at -0.50% for both bonds and the final acceptance amount to be determined at the Republic’s discretion.

A week later on Monday the 12th of October at 15:00 CET, the Republic of Slovenia announced its intention to launch a new 30 year line, as early as the following day.   

On the back of gathering supportive investor feedback, the Republic opened books on Tuesday, 13 October at 9:35 CET and released guidance at MS+65bps area for the new 30 year benchmark. Momentum continued into the morning and by 11:00 CET, the guidance was revised to MS+55bps area with books in excess of €6.1bn. Simultaneously it was announced that books go subject half an hour later. At 11:40 CET, the spread was revised to 45-50bps WPIR and the expected size was communicated with €750mn - €1bn.

At 11:55 CET, the Republic of Slovenia announced the results and pricing of the tender offers. Across the two notes, €172.98mn of tender instructions at a yield of -0.50% (i.e. the “non-competitive tender instructions”) were accepted. For the Jan-21 notes, the acceptance amount was €98.130mn at a repurchase price of 101.204%; for the Apr-21 notes, the repurchased amount was €74.85mn at a repurchase price of 101.637%.   

The new 30 year transaction was launched at 12:47 CET with a spread of MS+50bps and a size of €1bn. Books closed in excess of €5.2bn. The fair value of a new 30 year line was seen in the MS + low 50s area, hence the deal comes with a small negative new issue concession. The net proceeds from the 30 year issue will be used for settlement of the accepted bids under the tender offer conducted by the Republic concurrently with the 30 year issuance and for its general funding purposes. The new 30 year line successfully extends the Republic of Slovenia’s outstanding curve by more than 5 years.

Barclays, BNP Paribas (B&D), Commerzbank, GSIB, J.P. Morgan and UniCredit jointly led the offering.

The geographical and institutional investor distributions were as follows:

New 30 year statistics

Geographical distribution:

22%                       Germany / Austria

16%                       Rest of Europe

14%                       Americas

13%                       UK

13%                       France

8%                         Slovenia

7%                         Switzerland

5%                         Nordics

2%                         Other

Institutional distribution:

71%                       Asset Managers / Insurance / Pensions

21%                       Banks

4%                         Official Institutions

4%                         Others

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