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Slovenia places bonds despite 'junk' downgrade

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(Globalpost/GlobalPost)

Slovenia has raised 3.5 billion dollars (2.7 billion euros) in a successful bond sale, two days after Moody's downgraded the eurozone country's rating to "junk", the finance ministry said on Friday.

The country sold 2.5 billion dollars in 10-year dollar-denominated bonds at an average interest rate of 6.00 percent, and 1.0 billion dollars in five-year bonds at 4.95 percent, the ministry said.

"The success of this action proved the credibility of the government's reform programme and its access to international capital markets," it added, calling the auction "crucial" for the country.

Demand exceeded 16 billion dollars, it added.

The auction started initially on Tuesday but had to be postponed after Moody's downgraded the country's rating by two notches to "Ba1" from "Baa2".

The cut was because of the former Yugoslav republic's troubled banks and a deterioration in its public finances, Moody's said.

There has been speculation in recent weeks that Slovenia might become the next eurozone country to request a bailout because of problems with its banks, shaky public finances and a contracting economy.

After only six weeks in power, Prime Minister Alenka Bratusek must send to Brussels next week a clear plan, with Economic Affairs and Euro Commissioner Olli Rehn urging her to implement reforms adopted by the previous government and introduce new measures.

bk/stu/wai

http://www.globalpost.com/dispatch/news/afp/130503/slovenia-places-bonds-despite-junk-downgrade