Slovenia to issue new retail bond

The Finance Ministry is planning a second retail bond issue in March after a successful €261 million maiden issue in February last year. Like the first time the bonds will have three-year maturity but the coupon rate will be slightly lower, at 2.75%, CE Report quotes The Slovenia Times.

Retail bonds are intended solely for individuals and the first such issue in independent Slovenia attracted strong interest. The bonds, which have a coupon rate of 3.4%, are traded on the Ljubljana Stock Exchange.

"We are continuing with the effort to develop the capital market, disperse savings of small investors and improve financial literacy," Finance Minister Klemen Boštajnčič said about the motive behind the new issue.

People aged at least 18 with permanent or temporary residence status in Slovenia will be eligible to subscribe for the new bonds between 10 and 21 March at the banks NLB, OTP and BKS Bank and the stock brokerage Ilirika.

The bonds will be issued on 28 March and begin trading on the Ljubljana Stock Exchange on 1 April, when anyone will be able to buy them.

Each person will have to buy at least one lot with a nominal value of €1,000. The cap will be 250 lots per person, or €250,000, State Secretary Nikolina Prah said.

The upper limit per investor has been set a bit higher than last year to attract as broad a circle of investors as possible. The value of the issue will not be limited.

Last year, almost 10,000 residents bought the bonds and some 5,660 new trading accounts were opened.

According to Boštjančič, interest earnings will be taxed the same as interest earnings from cash deposits. This means interest of up to €1,000 will not be taxed.