Slovenia tenders for up to $1 billion notes by modified Dutch auction

By Susanna Moon

Chicago, Aug. 23 – The Republic of Slovenia began a cash tender offer for up to $1 billion maximum of three series of notes, including its $1.7 billion outstanding of $2.25 billion 5½% notes due 2022, $2.1 billion outstanding of $2.5 billion 5.85% notes due 2023 and $1.7 billion outstanding of $2 billion 5¼% notes due 2024.

Pricing will be set at 8:30 a.m. ET on Aug. 31 by modified Dutch auction using the purchase yield of a reference security plus a clearing spread as follows:

• For the 5½% notes, pricing will be set using 1 1/8% U.S. Treasury notes due July 2021 plus a maximum spread of 155 basis points;

• For the 5.85% notes, pricing will be set using 1½% U.S. Treasury notes due August 2026 plus a maximum spread of 125 bps; and

• For the 5¼% notes, pricing will be set using 1½% U.S. Treasury notes due August 2026 plus a maximum spread of 135 bps.

Holders also will receive accrued interest.

The offer will run until 11 a.m. ET on Aug. 30, with settlement set for Sept. 7.

Tender instructions may be submitted as non-competitive or as competitive. Non-competitive bids are ones that do not specify a purchase spread or those that specify a purchase spread greater than or equal to the maximum purchase spread. Non-competitive tenders will be deemed to have specified the maximum purchase spread for each note series. Competitive tender instructions specify a purchase spread of less than the maximum purchase spread. Purchase spreads may only be specified in increments of 1 basis point below the maximum spread.

If the amount of notes tendered under non-competitive tenders is more than the acceptance amount, the issuer will accept the notes for purchase on a pro rata basis. In that case, the clearing spread will be the maximum purchase spread, and the issuer will not accept for purchase any notes of that series tendered under competitive bids.

If the amount of notes tendered under non-competitive tender instructions and under competitive tender instructions that specify a purchase spread that is greater than or equal to the clearing spread is greater than the series acceptance amount, the issuer plans to accept for purchase

• First, all notes of that series tendered under non-competitive tender instructions in full;

• Second, all notes tendered under competitive tender instructions that specify a purchase spread above the clearing spread in full; and

• Third, all notes of the series tendered at the clearing spread on a pro rata basis so that the amount of notes purchased for that series is no more than the series acceptance amount.

The issuer said it will not accept any notes tendered for purchase at a purchase spread below the clearing spread.

Tender instructions must be submitted for a minimum nominal amount of $200,000 and in integral multiples of $1,000 after that.

The issuer is offering to purchase the notes “as part of effective Slovenian central government debt management,” according to an offer announcement.

The issuer said it reserves the right to accept significantly less or more than the $1 billion maximum principal amount.

The tender is contingent on the company’s plan to issue new euro-denominated notes.

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

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