By Marta Vilar – MADRID (Econostream) – Following is the full transcript of the interview conducted by Econostream on 20 February 2026 with Marjan Divjak, Director General of the Treasury Directorate of Slovenia’s Ministry of Finance:
Q: A few months ago, your finance minister indicated that you were considering issuing Panda bonds in 2026. Is this now a firm plan, or will it depend on market conditions?
A: The medium-term debt management strategy of the Republic of Slovenia emphasizes the diversification of the funding sources by investor type and geography. Accessing the onshore Chinese market would represent a natural continuation of this approach, following our presence on the US dollar and Samurai bond markets. However, execution will depend on market conditions. We will be estimating the funding cost in euros on the after-hedging basis. If the transaction proves economically justified and supports our diversification objectives, we will proceed with the Panda bond issuance.
Q: Do you already have a specific timing in mind?
A: The debt management strategy combines predictability with a high degree of flexibility. While March 2026 could be the earliest issuance window from a preparatory standpoint, the exact timing would depend on market conditions and relative pricing conditions. We would aim to execute in a window characterized by strong investor demand and supportive market technicals, consistent with our annual Financing Program.
Q: Can you provide any indication of the potential size of such an issuance?
A: The issue size is expected to be RMB2-4 billion.
Q: Your finance minister suggested that further Panda bonds could follow, possibly on an annual basis. Is this now confirmed policy, or does it remain under consideration?
A: The foreign currency issuance strategy of Slovenia is envisaging strategic approach. If an inaugural transaction proves cost-efficient and establishes strong investor demand, follow-up issuances would be considered to maintain market presence further to deepen investor relationships. However, continuity would depend on relative funding costs compared to euro issuance, as well as the stability and depth of investor demand. The objective is to be on the Panda bond market every year.
Q: What was the rationale behind choosing the Panda bond format?
A: The rationale is primarily strategic diversification. Slovenia is a small and very open economy and maintaining diversified market access reduces refinancing risk and strengthens resilience during periods of volatility in the euro market. The experiences on the USD and JPY markets have demonstrated that broadening the investor base enhances long-term funding stability and in the medium-term reduces funding costs. In addition to that, a Panda bond would in particular deepen engagement with Asian institutional investors and further integrate Slovenia into global capital markets. Although the currency exposure would be hedged, the diversification of the investor base itself has structural value.
Q: The US dollar has been in focus recently amid its marked depreciation. How does this affect your plans for future USD bond issuance?
A: EURUSD movements affect the USD issuance decisions to a certain extent. The currency exposure is by strategy hedged through cross-currency swaps, so that the key determinant remains the euro equivalent all-in funding cost. The US dollar market offers depth, liquidity and the strategic objective is to periodically access that market, subject to market conditions. The FX volatility is thus addressed by uniformly distributed access to the USD market.
Q: In your portfolio stress tests, do you still assume that the dollar will remain the dominant funding and stress currency for the foreseeable future, or has that assumption begun to shift?
A: The US dollar continues to be viewed as the global currency due to its systemic role on the international capital markets. The dollar remains central in global liquidity dynamics and crisis scenarios. Having said that, the euro is the home currency in which Slovenia will issue cumulatively between 90% and 95% of its debt.
Q: Are you considering issuance in other non-core foreign currencies in the near term?
A: Beyond the euro, US dollar and Samurai and the potential Panda bond format, we are not considering issuances in other currencies. Each new market requires operational preparation, regulatory alignment and sustained investor engagement, which is in our view important from the capacity-building perspective. Having said that, the approach is to prioritize depth and efficiency of the market over excessive fragmentation.
Q: What are your current plans regarding retail bond issuance?
A: Retail bond issuance has proven strategically important. It broadens our domestic investor base, strengthens public participation in sovereign financing, and contributes to capital market development. In addition to funding diversification, it supports financial literacy and fosters a stronger connection between citizens and the financing activities of the state. We will continue to evaluate retail issuance as part of our funding mix, balancing cost considerations with its broader structural and strategic benefits.
Q: Slovenia has established itself as an innovative issuer, having recently launched the world’s first sovereign blockchain-based bond as well as a sustainability-linked bond. Are you considering tapping either of these instruments this year?
A: Indeed, Slovenia has positioned itself as an innovative sovereign issuer. Following the issuance of the EU’s first sovereign digital bond under the ECB’s experimental framework and the launch of the first sovereign sustainability-linked bond in the European Union, we continue to assess further opportunities in both areas. Innovation, however, must serve strategic objectives. Digital bonds remain part of our technological exploration and capacity-building efforts, while sustainability-linked instruments are directly aligned with our environmental commitments and investor demand for ESG assets. The objective is to be further present in both segments of the market.
Q: Are there additional innovation initiatives under consideration?
A: The objective is to improve the efficiency, resilience and long-term credibility of Slovenia as a sovereign issuer, while maintaining strict adherence to cost-risk optimization principles. To achieve that, we are ready to use innovative approaches.
Q: You recently issued a 10-year euro bond. How did that transaction go?
A: The transaction went very well and was well received, demonstrating strong investor demand. The 10-year segment remains the core reference point on Slovenia yield curve and consistently attracts stable demand. The order book showed broad investor participation and reflected Slovenia’s improved credit standing and prudent fiscal management. The issuance underpinned the liquidity of the SLOREP yield curve.
Q: What should markets expect in terms of issuance frequency, maturities and sizes for 2026?
A: For 2026, markets can expect continued presence in the euro benchmark space, guided by the predictability of our funding calendar. At the same time, we will maintain flexibility in execution, including potential foreign currency transactions where economically justified. Active management of refinancing risk will remain a priority, and liability management operations may be considered depending on market conditions. Our funding strategy remains conservative, focused on safety and liquidity.
Q: Which segment of the curve is currently seeing the strongest demand?
A: The 10-year sector continues to attract the strongest and most consistent demand. It serves as the key benchmark for pricing and relative value estimation. At the same time, we observe selective demand for longer maturities on the reverse inquiry basis.
Q: Are you satisfied with the current composition of your investor base, or are there specific regions you are aiming to further develop?
A: We are satisfied with the diversification achieved in the past years, both geographically and institutionally. Foreign participation remains strong, and we have expanded engagement across Europe, Asia and North America. Nevertheless, diversification is an ongoing process. We will continue to deepen relationships with institutional investors, strengthen our presence in Asian markets and maintain proactive communication through non-deal roadshows and regular investor engagement. Our strategic objective remains stable, diversified and long-term oriented investor relationships that support cost-efficient and resilient sovereign funding.