Ljubljana, 29 August (STA) - Slovenia issued its first senior notes denominated in Japanese yen, known as Samurai bonds, on Thursday. The treasury issued 50 billion yen or roughly EUR 311 million worth of three- and five-year bonds.
The coupon rate of the three-year bonds is 0.75% and that of the five-year ones 0.89%, the Finance Ministry announced.
"With a highly successful inaugural offering, Slovenia has established a strong footprint in the Japanese market," the ministry said.
To hedge against the risks of the exchange rate of the Japanese yen against the euro, a currency swap was implemented in the entire value of the issue.
The actual cost of state budget financing after the currency swap is 3.031% for the three-year bond and 3.088% for the five-year bond, which already includes the hedging costs, the ministry said.
The notes were issued as social bonds, which means the funds raised will be used exclusively to finance social projects as part of the national budget.
Slovenia had mandated the banks BNP Paribas, Nomura and SMBC Nikko to jointly lead the offering.
The total demand exceeded 50 billion yen (JPY) and the issue size was set at JPY45.1bn for the 3-year and JPY4.9bn for the 5-year bond.
City banks, asset managers, lifers, regional and offshore accounts participated in the transaction, according to the treasury.
Japanese investors bought 51% of the three-year bond, a third of which banks and a good 10% were asset managers. In the case of the 5-year-bond, 65% of the investors come from the rest of the world with asset managers buying up almost the entire offering.
In the run-up to the issuance, Slovenia conducted a series of one-to-one investor meetings in Tokyo as well as a group investor call targeting Japanese investors.
After confirming positive investor appetite, Slovenia filed the Securities Registration Statement with the Kanto Local Finance Bureau on 13 August and officially announced the transaction to the public.
