The Republic of Slovenia: Debut EUR 1bn 0.125% 10-year Sustainability Bond offering due 1 July 2031
On Wednesday, 23rd June 2021, the Republic of Slovenia successfully entered the markets with its debut Sustainability Bond – a 10-year (July-31) benchmark issuance of EUR 1bn. This landmark transaction makes the Republic of Slovenia the first Sovereign in the CEE and second in the European Union to issue a Sustainability Bond. The success of the transaction, with more than EUR 8.4bn of demand, is a strong testimony of the confidence institutional investors have in the Republic of Slovenia, and particularly in its role in financing environmental and social transition.
The transaction priced at 15:23 pm CET. The new EUR 1bn 10-year Sustainability benchmark priced with a coupon of 0.125% and a reoffer spread of 10y MS+7bps, offering a 0.170% reoffer yield, equivalent to a spread of 35 bps over the DBR 0% 08/2031.
On Monday, 21st June 2021, at 11:00 CET and on the back of stable market conditions, Slovenia announced the mandate for its debut Sustainability Benchmark bond offering. Investors were also invited to join a presentation of the country’s new Sustainability Bond Framework at a Global investor call at 3:30 pm CET on the same day. Further 1-on-1 investor calls were held on Tuesday, 22nd June 2021.
After gathering supportive investor feedback, Slovenia announced the mandate for a 10-year EUR 1bn (no-grow) debut Sustainability bond offering in the afternoon of Tuesday, 22nd June 2021. Books were opened the following morning at 9:25am CET with initial guidance of MS+15bps area, representing a 8-9bps concession to the issuer’s existing curve. The spread was later revised lower to MS+10bps area as demand stood in excess of EUR 8bn (excl. JLM interest) at 10:53 am CET. Less than an hour later at 11:34 am CET, books stood in excess of EUR 10bn (incl. EUR 550mn JLM interest) and the transaction was launched with spread set at MS+7bps.
Books closed in excess of EUR 8.4bn (incl. EUR 600mn JLM interest) with demand from more than 210 investors.
Barclays (B&D), BNP Paribas, Crédit Agricole CIB, Goldman Sachs Bank Europe SE, J.P. Morgan and Nova KBM jointly led the offering. Crédit Agricole CIB acted as sole sustainability structuring advisor on Slovenia’s Sustainability Bond Framework.
The proceeds from Slovenia’s Sustainability Bond will fund government investments that contribute positively to the Republic’s environmental and social goals, and further promote and develop the domestic and international green, social and/or sustainability bond market. More details about Slovenia’s Sustainability Bond Frame can be found on the web page for investors.
The geographical and institutional investor distributions were as follows:
28.3 % Germany / Austria / Switzerland
20.0 % UK / Ireland
11.9 % France / Benelux
11.6 % Slovenia
9.2 % Nordics
8.6 % Italy
5.9 % Other Europe
4.3 % Iberia
0.2 % Middle East / Asia
47.4 % Asset Manager / Insurance and Pension Fund
35.3 % Bank / Private Bank
7.8 % Hedge Fund
7.5 % Central Bank / Official Institution
2.0 % Other