Slovenia gives update on tender, exchange offers for 5½%, 5.85% notes

By Susanna Moon

Chicago, Sept. 20 – The Republic of Slovenia said it obtained tenders for $369,683,000 of two series of its notes in the tender that ended at 11 a.m. ET on Sept. 19.

Holders had tendered for exchange another $577,175,000 principal amount of the notes.

As announced Sept. 12, Slovenia was tendering for up to $400 million of the notes by modified Dutch auction and also was offering to swap out the notes for a new issue.

Specifically, the company was offering to purchase up to $200 million of its $823,217,000 outstanding (original $2.25 billion) 5½% notes due 2022 and up to $200 million of its $779,294,000 outstanding (original $2.5 billion) 5.85% notes due 2023.

The issuer expects to accept for purchase $160,005,000 of the 2022 notes and $173,642,000 of the 2023 notes in the tender offer, according to a company update on Wednesday.

Based on the acceptance amount, the issuer said it expects to set the clearing spread at the maximum spread of 55 basis points for the 2022 notes and at 65 bps for the 2023 notes.

As a result the issuer expects to accept all of the notes tendered under non-competitive tender instructions without any pro rata scaling and none of the notes tendered under competitive tender instructions, the release noted.

In the exchange offers, the issuer said it expects to accept for exchange $211,072,000 of the 2022 notes and $312,294,000 of the 2023 notes.

The clearing spread is expected to be set at the maximum spread of 55 bps for the 2022 notes and at 65 bps for the 2023 notes.

The issuer expects to exchange all of the notes tendered under non-competitive exchange instructions without any pro rata scaling and none of the notes tendered for exchange under competitive instructions.

In the exchange offers, Slovenia was offering to issue 5¼% dollar-denominated notes due 2024 to be consolidated and form a single series with the $839,592,000 of outstanding $2 billion 5¼% notes due 2024.

Pricing was scheduled for 5 a.m. ET on Sept. 20 using the 1.625% U.S. Treasury note due August 2022 plus a maximum spread of 55 bps for the 2022 notes and 65 bps for the 2023 notes.

Holders also will receive accrued interest.

The new notes spread is 40 bps, and the reference security is the 2.25% U.S. Treasury note due August 2027.

The settlement date has been set for Sept. 27.

As previously announced, tender instructions could be submitted on a non-competitive or a competitive basis. Non-competitive instructions are ones that either do not specify a spread for notes or that specify a spread at or above the maximum spread. Competitive instructions specify a spread of less than the maximum spread.

The issuer expected to accept tenders for up to $200 million of each note series but said it will determine the allocation of the final amounts using its own discretion and that it reserves the right to accept significantly more, less or none of each series.

The offers contain a financing condition.

As reported, Slovenia priced €700 million in taps of its notes due March 22, 2027 and Nov. 3, 2040 on Sept. 20.

The dealer managers are 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 or 212 250-2955), BNP Paribas (+44 20 7595 8668, 888 210-4358, 212 841-3059 or liability.management@bnpparibas.com), Goldman Sachs International Bank (+44 20 7774 9862, 800 828-3182, 212 902-6595 or liabilitymanagement.eu@gs.com) and J.P. Morgan Securities plc (+44 20 7134 2468, 866 834-4666, 212 834-3617 or em_europe_lm@jpmorgan.com).

Lucid Issuer Services Ltd. (+44 20 7704 0880 or slovenia@lucid-is.com) is the information, tender and exchange agent.

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