Slovenia tenders for three series, offers notes due 2024 in exchange

By Susanna Moon

Chicago, Feb. 20 – The Republic of Slovenia is tendering for its $452.14 million of outstanding $2.25 billion 5½% notes due 2022, $293,358,000 of outstanding $2.5 billion 5.85% notes due 2023 and $1,368,381,000 of outstanding $2,528,789,000 5¼% notes due 2024.

The issuer expects to purchase up to $200 million principal amount of the 2022 notes, up to $150 million principal amount of 2023 notes and up to $300 million principal amount of the 2024 notes by way of modified Dutch auction, according to an announcement.

Slovenia also is offering to exchange the 2022 notes and 2023 notes for dollar-denominated 5½% notes due 2024, to be consolidated and form a single series with the existing 2024 notes.

In addition, the issuer is also allowing holders to tender as their first preference all of the 2022 notes and 2023 notes and exchange them as their second preference to the extent any 2022 notes and 2023 notes are not accepted for purchase in the tender, the release noted.

The offers will remain open until 11 a.m. ET on Feb. 27.

Pricing will be set at 8 a.m. ET on Feb. 28 using the 2.375% U.S. Treasury due January 2023 as a reference security and a clearing spread to be set using a separate modified Dutch auction with a maximum spread of 40 basis points for the 5½% notes, 45 bps for the 5.85% notes and 55 bps for the 5¼% notes.

For the new issue due 2024, pricing will be set using the 2.375% U.S. Treasury due January 2023 plus 65 bps.

Holders also will receive accrued interest.

The issuer said it is making the tender offers using proceeds of new financing as part of the republic’s management of its central government debt.

The issuer is offering to exchange the notes as part of its management of its central government debt and also to provide investors an opportunity “to move into a more liquid security,” the release noted.

Slovenia said it plans to issue new euro-denominated notes and the tender offer is contingent on closing of that issue whereas the exchange offer is not.

Tender instructions may be submitted on a non-competitive or a competitive basis as follows: Non-competitive tender instructions are tender instructions that either do not specify a spread for the notes or that specify a spread greater than or equal to the maximum spread. Each non-competitive tender instruction will be deemed to have specified the maximum spread for that series of notes and a competitive tender instruction is one that specifies a spread of less than the maximum spread. Clearing spreads may only be specified in increments of 1 bp below the maximum spread in the competitive tender instructions.

For tender preference instructions made as a second preference election, the submission of a tender preference instruction constitutes an election by that noteholder to tender their notes as their first preference and to the extent that any notes are not accepted for purchase in the tender to exchange them as their second preference.

Instructions must be submitted for a minimum of $200,000 principal amount of notes and in integrals of $1,000 after that.

Settlement has been set for March 7.

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), Goldman Sachs International Bank (+44 20 7774 9862, 800 828-3182 or 212 902-6595 or liabilitymanagement.eu@gs.com), HSBC Bank plc (+44 20 7992 6237, 888 HSBC-4LM, 212 525-5552 or liability.management@hsbcib.com) and J.P. Morgan Securities plc (+44 20 7134 2468, 866 834-4666, 212 834-3617 or em_europe_lm@jpmorgan.com) are the dealer managers. Lucid Issuer Services Ltd. (+44 20 7704 0880 or slovenia@lucid-is.com) is the information, tender and exchange agent.

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