The Slovak Republic has issued a new 10-year bond worth €2.5 billion with a coupon of 4.25% per annum. It was the second and final syndicated bond issue of the year. The new bond’s final annual yield was 4.309%, the Debt and Liquidity Management Agency (ARDAL) announced on Wednesday.
According to the agency, the issue was priced at a spread of 77 basis points above the interest rate swap rate, equivalent to 81.3 basis points above the yield on the German government bond maturing in August 2036. Deutsche Bank, HSBC, J.P. Morgan, and Slovenská sporiteľňa acted as lead managers for the issue, which was sold through a group of banks.
The final order book included more than 120 investors, with total demand exceeding €4.5 billion. “The largest share of the issue was allocated to banks and private banks, which accounted for 45% of the transaction. They were followed by asset managers and investment funds with a 31% share. Central banks and official institutions accounted for 17%, while hedge funds received 4% and insurance companies together with pension funds received 3%,” ARDAL said.
Geographically, the transaction achieved broad international distribution, according to the agency. The largest share, 22%, went to investors from Germany, Austria, and Switzerland. The United Kingdom followed with a 21% share. Investors from Southern Europe accounted for 11%, while the Nordic countries, Central and Eastern Europe, and the Middle East each received 10%. Investors from the Benelux countries accounted for 9%, while France received the remaining 7%.
“The transaction represented a historic milestone for the Slovak Republic, as it was the first-ever Slovak 10-year euro-denominated benchmark issue to be priced at a spread below the French government bond yield curve. This result points to a significant strengthening of Slovakia’s relative value position within Europe and underscores investor confidence in the credit quality of the Slovak Republic,” ARDAL added.
Source: TASR
