Rating:A3/AA-/A
Amount: €500m Reg S
Maturity: 3 March, 2081
Issue/reoffer price:99.388
Coupon: 0.6875%
Yield: 0.700%
Spread at reoffer: 75bp over mid-swaps
Launched: Wednesday, January 27
Payment date:February 3
Joint books: BNP Paribas, Deutsche Bank, Goldman Sachs, HSBC
Bookrunners’ comment:
Slovenia had said that they wanted to explore the ultra-long part of the curve and take advantage of the bid for duration.
There isn’t much curve between 50 and 60 years, so you can get an extra 10 years at very little cost. Very few investors that are happy to buy 50 years will refuse a 60 year.
There was no new issue premium on this transaction.
The all-in cost of 60 year funding was very attractive to Slovenia, which has tried to be prudent and conservative with its debt management.
This deal is officially the longest ever bond raised in CEE and it showed that there remains a strong bid for duration.
France, which did a 50 year trade this month, was a good testing point for demand for longer-dated European sovereign bonds.
Market appraisal:
“…this is such high rated paper I don’t even think it counts as emerging market any more. It benefits from the ECB [bond] buying too, so it is different from the other EM paper out there.”
