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Ministry of Finance to issue bonds for citizens

The Ministry of Finance will issue bonds for citizens on 1 February with a maturity of three years, an issue volume of €250 million and an interest rate of 3.4 %.

The bond will be issued to natural persons aged 18 or over who have permanent or temporary residence in the Republic of Slovenia. Later, when the bonds are admitted to trading on the Ljubljana Stock Exchange, they will be freely transferable and can be purchased by anyone.

The minimum subscription amount will be €1,000 and the maximum of €100,000; however, in the event of oversubscription, the number of bonds allocated to each investor may be less than the subscription amount, but not less than €1,000.

Subscription will take place between 1 and 16 February 2024.

According to the latest information, the bonds will be available at 249 subscription points throughout the country (37 NLB branches, 45 NKBM branches, 109 Post of Slovenia branches, 8 BKS Bank branches, 46 SKB branches, 4 Ilirika branches) through five distributors cooperating with the Ministry of Finance. The distributors are financial institutions NLB, NKBM, BKS, SKB and Ilirika.

Government bonds are investments designed to provide liquidity for state needs. Government bonds are a low-risk investment and will be managed and repaid in accordance with the highest standards of transparency and investor protection, like all bonds issued by the Republic of Slovenia to date.

With the adoption of the Act on Reconstruction, Development and Provision of Financial Resources, interest earned by natural persons investing in government securities issued in accordance with the Public Finance Act and offered exclusively to natural persons in public offerings, on both treasury bills and bonds issued in 2024, 2025 or 2026, will, for income tax purposes, be treated the same as interest earned on cash deposits with banks and savings banks.  This means that this interest, together with interest on cash deposits, will not be taxed up to €1,000.

The issue of bonds for citizens is intended to provide additional state budget funds in the coming years, when spending on post-flood reconstruction in Slovenia is expected to be at its highest. At the same time, we also want to contribute to the development of the capital market in the Republic of Slovenia and to greater financial literacy among the population, and to activate a part of households' deposits with banks, which, according to the latest data from the Bank of Slovenia, amount to around €29 billion.

Issuing government bonds helps pursue several objectives:

  • To provide additional budget funds during the period when post-flood reconstruction will be most intensive.
  • To stimulate interest in capital markets. Retail investors are still not sufficiently aware of savings opportunities on capital markets. The purchase of government bonds can encourage them to take a greater interest in this area and improve their financial literacy.
  • We offer an alternative with a higher yield.  Retail investors often have savings only in banks. Investing in government bonds provides greater diversification and reduces risk.
  • To improve financial literacy. Gaining experience with bonds helps retail investors improve their financial knowledge, which makes them better equipped to make financial decisions and manage their personal finances.
  • To encourage people to engage with such instruments on a permanent basis, not just occasional or one-off engagement.

While the issue was already planned for last year, new circumstances regarding the 2023 Gross Domestic Product (GDP) estimate, inflows from the Recovery and Resilience Facility, the level of the budget liquidity, and the achievement of the 2023 government debt target of 69.9% of GDP led to the decision to postpone the issue to this year.