Slovenia expects to buy $1.25 billion notes in Dutch auction tender

By Susanna Moon

Chicago, May 11 – The Republic of Slovenia said investors had tendered $3.1 billion principal amount of three series of notes in the offer that ended at 11 a.m. ET on May 10.

As announced May 3, the government was offering to buy up to $750 million of its $2.25 billion of 5½% notes due 2022, its $2.5 billion of 5.85% notes due 2023 and its $2 billion of 5¼% notes due 2024.

Slovenia expects to accept $550 million of the 2022 notes, $400 million of the 2023 notes and $300 million of the 2024 notes, according to a government notice.

On this basis, the issuer said it expects to set the clearing spread at the maximum spread of 180 basis points for 2022 notes, 140 bps for the 2023 notes and at 150 bps for the 2024 notes.

Accordingly, the scaling factor works out to 65.022% for the 2022 notes, 84.425% for the 2023 notes and 86.285% for the 2024 notes, the release noted.

Pricing will be set at 8 a.m. ET on May 11 using a modified Dutch auction based on a clearing spread over a reference Treasury, with settlement scheduled for May 18.

For the 5½% notes, the reference security is the 1 3/8% Treasury due April 2021 and the maximum purchase spread will be 180 bps. For the 5.85% notes the reference security is the 1 5/8% Treasury due February 2026 and the maximum purchase spread will be 140 bps, and for the 5¼% notes the reference security will also by the 1 5/8% Treasury due February 2026 and the maximum purchase spread will be 150 bps.

Slovenia will fix the amount of notes from each series it will buy and the clearing spread at its discretion. All notes from an individual series will be bought at a price based on the same clearing spread.

Tender instructions may specify a purchase spread or they may be non-competitive, in which case they will be deemed to be at the maximum for that series of notes.

In addition to the purchase price, holders will also receive accrued interest.

The tender is subject to conditions including the successful completion of an offering of new euro-denominated notes.

Barclays Bank plc (+44 20 3134 8515, 800 438-3242, 212 528-7581 or eu.lm@barclays.com), Deutsche Bank AG, London Branch (+44 20 7545 8011, 866 627-0391, 212 250-2955 or liability.management@db.com), Goldman Sachs International Bank (+44 20 7774 9862, 800 828-3182, 212 902-5183 or liabilitymanagement.eu@gs.com)and J.P. Morgan Securities plc (+44 20 7134 2468, 800 834-4666, 212 834-3617 or em_europe_lm@jpmorgan.com) are dealer managers. Lucid Issuer Services Ltd. (+ 44 20 7704 0880 or slovenia@lucid-is.com) is information and tender agent.

Slovenia said that the tender will not be eligible for the offer procedures of DTC. Rule 144A notes must be held through a direct participant in Euroclear/Clearstream or transfer them so that they are held through a direct participant.

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