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Borrowing and state budget debt management

In the state budget, which is adopted by the National Assembly of the Republic of Slovenia for each individual year, expenditure may exceed revenue, which means that borrowing is needed in order to finance the deficit. Borrowing is also used to pay off the principal of the debt which falls due for payment in such a year if it cannot be repaid from the budget surplus or other revenue from state-owned assets.

The state budget debt may be managed through the buyback and exchange of the existing debt and through transactions by means of which the borrowing currency and interest rate type are changed. The Ministry of Finance manages the debt maturity structure by selecting the appropriate maturity for the debt issued in terms of refinancing risk. It is also responsible for the timely repayment of the principal and interest on the government debt at maturity.

To ensure the financing of the state budget, the Ministry of Finance prepares annual budget financing programmes; debt financing and management also entails managing the liquidity of government securities, establishing and maintaining contact with investors in government securities, cooperating with credit rating agencies in producing credit risk assessments of the Republic of Slovenia, making analyses and calculations for executing government debt management transactions, and repaying the principal and interest on government debt.

The debt of the Republic of Slovenia

Information on the general government debt and, more specifically, the central government debt by instrument, currency, interest rate type and repayment schedule.

Central government debt by instrument, in EUR million

The state budget debt is part of the central government debt.

The criteria for classifying debt as internal or external debt derive from the national methodology, which is consistent with the methodology of the International Monetary Fund (Government Finance Statistics 2014). For loans, the criterion for classifying debt as internal or external is the residence of the creditor. For securities, the classification criterion is the place of registration with the Central Securities Clearing System; accordingly, securities registered with the Central Securities Clearing System in Slovenia (KDD – the Central Securities Clearing Corporation) are considered internal debt, regardless of the creditor's residence, while securities registered with the Central Securities Clearing System outside Slovenia (Euroclear, Clearstream) are considered external debt, regardless of the creditor's residence.
Instrument 31 December 2020 31 January 2021
Internal debt 32,258.3 33,298.0
Loans 275.0 225.0
Bonds 31,983.3 33,073.0
External debt 2,060.7 2,060.7
Loans 769.3 769.3
Bonds 1,291.5 1,291.5
Total 34,319.1 35,358.7
Currency - January 2021 Total debt Internal debt External debt
USD 1,291.5 3.7% 0.0 0.0% 1,291.5 62.7%
EUR 34,037.4 96.3% 33,268.1 99.9% 769.3 37.3%
Other 29.8 0.1% 29.8 0.1% 0.0 0.0%
Total 35,358.7 100.0% 33,298.0 100.0% 2,060.7 100.0%
Central government debt repayment schedule by year as at 31 January 2021, in EUR million
Debt service 2021 2022 2023 2024 2025
Principal 3,387.1 1,377.5 2,436.2 2,503.5 2,348.4
Internal debt 3,367.8 1,150.4 2,313.3 1,500.0 2,125.0
External debt 19.3 227.1 122.9 1,003.5 223.4
Interest 711.7 611.3 567.8 540.9 453.6
Internal debt 647.2 547.2 517.9 511.6 442.2
External debt 64.6 64.2 49.9 29.3 11.4
Total debt service 4,098.9 1,988.9 3,004.0 3,044.3 2,802.0
Central government debt repayment schedule by quarter, 2021, as at 31 January 2021, in EUR million
Debt service Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021
Principal 1,678.4 994.1 0.7 713.9 3,387.1
Internal debt 1,677.7 985.2 0.0 704.9 3,367.8
External debt 0.7 9.0 0.7 9.0 19.3
Interest 382.2 41.9 195.3 92.3 711.7
Internal debt 362.3 30.1 175.4 79.4 647.2
External debt 19.9 11.9 19.9 12.9 64.6
Total debt service 2,060.6 1,036.1 196.0 806.2 4,098.9

Financing programme for the execution of the budget of the Republic of Slovenia

The financing programme is the basic operational document for financing the execution of the state budget and government debt management transactions. It defines the structure of instruments for financing the state budget and managing government debt, taking into account the optimisation of the currency, maturity and interest structure of the debt and the management of its portfolio risks. The applicable financing programme adopted by the Government of the Republic of Slovenia always relates to the latest adopted state budget.

Borrowing through the issuance of the Republic of Slovenia’s government bonds and treasury bills is the primary state budget financing instrument. In accordance with each financing programme, other financing instruments may be used to finance the state budget.

Bonds

A bond is a book-entry, registered and transferable debt security with a maturity of more than one year. For investors, bonds are a form of financial investment on the basis of which they receive predetermined interest payments for the money lent (coupon). Benchmark bonds are issued by the Republic of Slovenia in accordance with the Annual Budget Financing Programme of the Republic of Slovenia. The Ministry of Finance defines the maturity of bonds and the dynamics of their issuance subject to market conditions, in accordance with the strategic and operational objectives set out in the financing programme, taking into account the maturity structure of the existing state budget debt. In the European market and other markets, Slovenian government bonds are issued by syndication. Bonds are not issued via auctions.

Treasury bills

Treasury bills are book-entry, serial, registered and transferable securities with maturity terms of three, six, twelve and eighteen months. They are issued in denominations of EUR 1.000 and the face value of each issue depends on the decision of the issuer.

Treasury bills are discounted securities: when treasury bills are issued, the investor pays a discounted amount, and when the bill matures, the issuer pays the face value of the treasury bills. Interest is calculated using a simple interest calculation and the decursive interest calculation method, taking into account the actual number of days to maturity and using 360 days in a year.

The primary issuance of treasury bills takes place through auction. At an auction, investors or primary dealers, respectively, submit bids for the purchase of treasury bills, which determines the nominal relative interest rate to be paid on the issue offered. In auctions, uniform pricing is used, meaning that bids at the uniform price or above are accepted at the uniform price (bids at the uniform price may be partly accepted), and bids below the uniform price are not accepted.

Holders of treasury bills may be legal or natural persons who bid through primary dealers for treasury bills. The settlement of treasury bills takes place two working days after the auction.

Treasury bills are money market instruments listed on the Ljubljana Stock Exchange.

For more information on treasury bills, please read the offering circular or contact:

Planned issues of treasury bills in 2021

The indicative amount of an individual auction will be published in the invitation and the press release five working days before the auction on the Ministry of Finance website.

Three-month treasury bills
T-Bill Designation Auction Date Settlement Date Maturity Date Number of days
TZ185 12 January 2021 14 January 2021 15 April 2020 91
TZ186 9 February 2021 11 February 2021 13 May 2020 91
TZ187 9 March 2021 11 March 2021 10 June 2021 91
TZ188 13 April 2021 15 April 2021 15 July 2021 91
TZ189 11 May 2021 13 May 2021 12 August 2021 91
TZ190 8 June 2021 10 June 2021 9 September 2021 91
TZ191 13 July 2021 15 July 2021 14 October 2021 91
TZ192 7 September 2021 9 September 2021 9 December 2021 91
TZ193 12 October 2021 14 October 2021 13 January 2022 91
TZ194 9 November 2021 11 November 2021 10 February 2022 91
Six-month treasury bills
T-Bill Designation Auction Date Settlement Date Maturity Date Number of days
SZ118 12 January 2021 14 January 2021 15 July 2021 182
SZ119 9 February 2021 11 February 2021 12 August 2021 182
SZ120 9 March 2021 11 March 2021 9 September 2021 182
SZ121 13 April 2021 15 April 2021 14 October 2021 182
SZ122 11 May 2021 13 May 2021 11 November 2021 182
SZ123 8 June 2021 10 June 2021 9 December 2021 182
SZ124 13 July 2021 15 July 2021 13 January 2022 182
SZ125 7 September 2021 9 September 2021 10 March 2022 182
SZ126 12 October 2021 14 October 2021 14 April 2022 182
SZ127 9 November 2021 11 November 2021 12 May 2022 182
Eighteen-month treasury bills
T-Bill Designation Auction Date Settlement Date Maturity Date Number of days
OZ16 13 April 2021 15 April 2021 13 October 2022 546
OZ17 12 October 2021 14 October 2021 13 April 2023 546

Primary dealers of government securities

A primary dealer is a financial institution that is in a contractual relationship with the Republic of Slovenia. Among other things, a primary dealer acts as an agent in the sale of bonds and treasury bills to final investors and ensures their liquidity in the secondary market.

Primary dealers of Republic of Slovenia bonds

Primary dealers of Republic of Slovenia treasury bills

Trading in government securities

Issued government securities are traded in a variety of secondary securities markets.

Republic of Slovenia bonds registered with the Central Securities Clearing Corporation (KDD) and Republic of Slovenia treasury bills are listed on the Ljubljana Stock Exchange.

Republic of Slovenia bonds registered with Euroclear or Clearstream are listed on the Luxembourg Stock Exchange.

Benchmark bonds denominated in EUR are also traded on MTS Slovenia.

In the settlement of transactions in the secondary market, Slovenia supports T + 2 as the standard settlement period for OTC secondary market transactions in transferable government securities.

T+2 as standard settlement period in OTC Secondary Markets for transferable government securities

A statement by the Government of the Republic of Slovenia on the selection of a home Member State regarding the disclosure of regulated information in connection with the issuances of securities:

In accordance with Article 66 of the Market in Financial Instruments Act, the Government of the Republic of Slovenia hereby declares that it has selected the Republic of Slovenia as the home Member State and the Securities Market Agency as the competent authority regarding the disclosure of regulated information in connection with the issuances of securities.