Exclusive: Slovenia DMO head: Committed to Appearing Every Third Year on the Global Market

28 March 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Slovenia is sticking to its strategic objective to come to global markets every third year to issue a benchmark-size bond, according to Marjan Divjak, Director General of the Treasury Directorate of Slovenia’s Ministry of Finance.

In a recent interview with Econostream (transcript here), Divjak said, ‘The strategic commitment is that Slovenia is to appear every third year on the global market, subject to the cost of funding, issuing a benchmark-size bond of 1bn issue size, where liquidity can be added by taps.’

Asked about the share of Slovenian government debt in USD, Divjak observed that the country had issued a new 10-year USD 1bn bond towards the end of last year. The 11bp spread versus the EUR SLOREP secondary market ‘was effectively the cost of diversification, which the Republic was willing to accept’, he commented.

In terms of diversifying Slovenia’s investor base, issuing in yen remained a ‘strategic objective’, he said, though would always depend on the cost compared to funding in euros.

Asked about the 10-year syndication of 13 March, the Slovenian DMO head said that it had been a success. ‘The market was during the intra-day execution conducive, and the book size exceeded six times the upper range of the tap size’, he said. ‘The quality of the book was very good. The objective is further to increase the size of the bond.’

Even though Slovenia’s budget deficit had to be readjusted due to the floods that took place in the country in 2023, Divjak reassured that Slovenia enjoyed a robust position on capital markets.

Asked about the impact of the European Central Bank’s termination of PEPP reinvestments, the Slovenian DMO head said that ‘the gradual pace of unwinding of the ECB balance sheet, Slovenia's robust credit position and the strategy we are pursuing to balance supply with demand are limiting the impact on Slovenia spreads.’