The nonsense of the Golob government will burden taxpayers even more – the state has newly borrowed another one and a half billion

By: G. B.

The state issued a 10-year bond on the international capital markets in the amount of 1.5 billion euros with a coupon interest rate of three percent and a maturity date of March 10^th, 2034. In other words, our government has borrowed another one and a half billion euros, which we will repay over the next ten years. “Slovenia, as the first country among issuers this year, has thus effectively utilised the available liquidity in the market,” boasted the Ministry of Finance in response to this.

The success of the transaction was evident, according to the Ministry’s statements, in the extensive final order book, where the total demand exceeded 6.8 billion euros, including 785 million euros in demand from the issue organisers. “This testifies to strong investor support for Slovenia to successfully cover the needs of financing the state budget this year,” they stated. Slovenia issued the bond with a yield to maturity of 3.043 percent and a price of 99.621 percent. The spread over the mid-swap rate was 58 basis points. The transaction was concluded at fair value with a negligible premium on the new issue, as noted by the ministry.

The mandate for the new issue of the 10-year bond RS39 was granted by the state on Tuesday. The order book was opened on Wednesday, and on the same day, the transaction was concluded with a final issue size of 1.5 billion euros. The issue organisers were Barclays, BNP Paribas, Deutsche Bank, Erste Group, Goldman Sachs Bank Europe, and Nova KBM. The Budget Implementation Act for 2024 and 2025 stipulates that the state can borrow a maximum of 4.7 billion euros this year and a maximum of 4.3 billion euros in 2025. The annual debt repayment plan foresees a total repayment of 3.2 billion euros for this year, including 2.5 billion euros in principal and the remainder in interest.

Such borrowing is not surprising given the political priorities of the Golob government, which must first finance its “non-governmental” supporters, with the main victims of this policy being healthcare and infrastructure projects. Additionally, it is worth noting the policy of new tax burdens, which particularly impact the economy.