Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Disclaimer Important Notice: You must read the following before continuing By reading this presentation, you agree to be bound by the following limitations: This presentation may be consulted only by qualified investors other than individuals and to whom such access is not restricted by the laws of any jurisdiction. The information in this document has been prepared solely for use at a presentation to be held in connection with the proposed offering (the “Offering”) of Eurodenominated government bonds (the “Securities”) by THE REPUBLIC OF SLOVENIA (the “Issuer”). This presentation has been prepared and issued by the Issuer to provide preliminary information about the Securities to a limited number of sophisticated prospective investors, to assist them in determining whether they have an interest in the type of Securities described herein. This presentation does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any Securities, and nothing contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. The information in this presentation is subject to verification, completion and change. The contents of this presentation have not been verified by the Issuer or by Barclays Bank PLC, Deutsche Bank AG London Branch, Goldman Sachs International, HSBC France, Nova Ljubljanska banka d.d. (the “Lead Managers”). Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Issuer or any of the Lead Managers (and their shareholders, directors, officers or employees) or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. Neither the Issuer nor the Lead Managers nor any of their shareholders, affiliates (within the meaning of Rule 405 under the U.S. Securities Act of 1933, as amended (the "Securities Act")), directors, officers or employees nor any other person accepts any liability (in negligence or otherwise) whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. In giving this presentation, neither the Issuer nor its respective advisers and/or agents undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. Investors and prospective investors in the Securities of the Issuer are required to make their own independent investigation and appraisal of the business and financial condition of the Issuer and the nature of the Securities. Any decision to purchase Securities in the context of the proposed Offering, if any, should be made solely on the basis of information contained in an offering circular published in relation to such Offering. No reliance may be placed for any purpose whatsoever on the information contained in this presentation, or any other material discussed verbally, or on its completeness, accuracy or fairness. This presentation does not constitute a recommendation regarding the Securities of the Issuer. This presentation contains “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts or estimates of cash flows, yield or returns, scenario analyses and proposed or expected portfolio composition. The forward-looking information contained herein involves known and unknown risks, uncertainties and other factors, and is based upon certain assumptions about future events or conditions. The forward-looking information is intended only to illustrate hypothetical results, performance, achievements, events or conditions under those assumptions. Actual results, performance or achievements may not be consistent with, and may differ materially from, those assumed or implied. None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the presentation. Accordingly, actual results may vary and the variations may be material. Prospective investors should understand such assumptions and evaluate whether they are appropriate for their purposes. We assume no obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. 0 Disclaimer This document and the information herein relating to the Issuer is believed to be reliable. The Issuer relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. This presentation contains tables and other statistical analyses (the “Statistical Information”) prepared in reliance upon such information. The Statistical Information may be subject to rounding. Numerous assumptions were used in preparing the Statistical Information, which may or may not be reflected herein. No assurance can be given as to the Statistical Information’s accuracy, appropriateness or completeness nor as to whether the Statistical Information and/or the assumptions upon which they are based reflect present market conditions or future market performance. Past performance is not indicative of future results. Any weighted average lives, yields and principal payment periods shown in the Statistical Information are based on prepayment assumptions, and changes in such prepayment assumptions may dramatically affect such weighted average lives, yields, and principal payment periods. Prepayments on the underlying assets may occur at rates slower or faster than the rates shown in the attached Statistical Information. The characteristics of the Securities may differ from those shown in the Statistical Information due to differences between the actual underlying assets and the hypothetical underlying assets used in preparing the Statistical Information. This presentation is confidential and is being provided to you solely for your information and may not be reproduced or redistributed to any other person, in whole or in part, directly or indirectly, by any medium or in any form for any purpose. This document is not intended for distribution to, or use by any person or entity in any jurisdiction where such distribution or use would be contrary to local law or regulation. This document and its contents have not been approved by the UK Financial Services Authority or an authorised person (as defined in the Financial Services and Markets Act 2000 (the “FSMA”)) for distribution. This document is only being distributed to and is only directed to (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) (a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication may relate is only available to, and any invitation, offer, or agreement to engage in such investment activity will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. The information in this presentation is given in confidence and the recipients of this presentation should not engage in any behaviour in relation to qualifying investments or related investments (as defined in the FSMA and the Code of Market Conduct made pursuant to FSMA) which would or might amount to market abuse for the purposes of FSMA. Neither this presentation nor any copy of it may be taken or transmitted into, or distributed, directly or indirectly in, the United States of America, its territories or possessions. This presentation is not a public offer of securities for sale in the United States. The Securities proposed in the Offering have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The Issuer does not intend to register any portion of the proposed Offering under the applicable securities laws of the United States, or conduct a public offering of any Securities in the United States. Any failure to comply with these restrictions may constitute a violation of U.S. securities laws, as applicable. The distribution of this document in other jurisdictions may also be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. In other EEA countries, these materials are intended only for persons regarded as professional investors (or equivalent) in their home jurisdiction. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. Similar ratings on different types of notes do not necessarily mean the same thing. The significance of each rating should be analysed independently of any other rating. 1 Slovenia: Solid fundamentals protect during the international crisis January 2011 Ministry of Finance Republic of Slovenia Table of Contents Country Overview Key Strengths Strong Economic Performance over the Past Years Policy response to global financial crisis Financing Programme 3 Key Considerations Euro area member for over four years (joined January 1st, 2007) Prudent fiscal policy track record and steady competitiveness position Low government debt with low borrowing requirement in the future Sound banking system Solid economic fundamentals and adequate policy response to crisis to mitigate its impact Government committed to stability and sustained reform 4 Country Overview 5 Slovenia: Member of the Euro area for 4 years Population of 2 million Austria Italy Hungary Track record of strong macroeconomic performance Slovenia Croatia GDP per capita over 88 % of EU average Stable multi-party democracy Joined the euro area in January 2007 Joined OECD in June 2010 6 A strong sovereign credit in the euro zone Double A credit rating (Aa2 / AA /AA) Well Peer credit ratings diversified and open economy Sustained real convergence Belgium Aa1/ AA+/AA+ Low public debt burden (35.4 % of GDP in 2009) Slovenia Aa2 / AA /AA ECB eligibility for government paper Italy Aa2/A+/AA- Well recognised economic and political stability Portugal A1/ A- /A+ Source: Moody’s/ Standard & Poors/Fitch (January 3rd, 2011) 7 Also a strong credit in European Union AAA AU; DK; FI; FR; DE; LU; NL; SE; UK AA+ BE AA SLOVENIA; ES A+ A IT; SK MT; EE; CZ; IRL; CY A- PT, PL BBB BG; LT BBBBB+ HU GR, RO, LV Source: Standard & Poor`s, January 3rd, 2011 8 Strong Economic Performance over Past Years 9 High and sustained degree of real convergence GDP per capita PPS 2009 (EU-27=100) 140 120 100 80 60 40 20 Latvia Lithuania Estonia Hungary Slovakia Portugal Malta Czech Republic Slovenia Greece Cyprus Spain Italy France United Kingdom Finland Germany Belgium Sweden Denmark Austria Ireland Netherlands 0 GDP per capita in PPS (EU-27=100) 120 115 110 105 100 95 90 85 80 75 70 1998 1999 2000 2001 2002 2003 Euro area (16 countries) Source: Eurostat 2004 2005 2006 2007 2008 2009 Slovenia 10 Growth led by exports and investments Real GDP 8 6 4 % of change 2 0 -2 -4 -6 -8 -10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f 2011f 2012f Euro area (16 countries) Slovenia Source: Eurostat 11 Slovenia has a highly diversified economy Industry, agriculture and services value added, 2009 Comparable to EU member states Growth is driven by manufacturing and services Successful and growing tourism industry Small agricultural sector Source: SORS 12 Export driven economy Focus on high value-added exports More than two thirds of exports destined for EU € 16 bn exports of goods and services in 2009; 45.9% of GDP Geographic distribution, 2009 Exports of goods (2009) Food and beverages; 4,2% Fuels and raw materials; 6,3% Machinery and equipment; 40,3% Chemicals products; 16,5% Manufactured goods; 32,8% Source: SORS 13 0 Source: Eurostat 14 Netherlands Austria Luxembourg Malta Germany Cyprus Slovenia Finland Belgium Italy France Total employment in 2009 (%) Portugal 20 Ireland 50 Slovakia 70 Spain Malta Italy Spain Slovakia Greece Belgium Ireland France Luxembourg Portugal Slovenia Finland Cyprus Germany Austria Netherlands Good labour market performance Unemployment rate in October 2010 (%) 90 80 25 20 60 15 40 30 10 5 10 0 Competitiveness preserved and convergence to EU levels sustained Real effective exchange rate index (1999 = 100) Productivity Labour productivity per person employed (EU=27) 120 130 125 110 120 115 100 110 105 90 100 95 80 90 85 70 80 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 60 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 European Union (27 countries) Germany Slovenia Euro area (16 countries) Source: Eurostat Slovenia Source: Eurostat 15 Maintaining market share in EU-15 Exports of goods from Slovenia to EU-15 as % share of EU-15 intra-EU imports Source: Eurostat 16 Strong investment over the past years Slovenia´s current account balance (% GDP) Current account balance % GDP (2009) 2003 8 2004 2005 2006 2007 2008 2009 0 6 -1 4 2 -2 Luxembourg Netherlands Belgium Slovenia France Ireland Italy Malta Cyprus Slovakia -4 Portugal -2 Greece 0 -3 -4 -6 -8 -5 -10 -12 -6 -14 -7 Source: Eurostat, January 2011 Source: Eurostat 17 Good financial position and sound banking system Low external indebtedness of the Outstanding gross external debt in euro area % GDP (2009) economy 1000 indebtedness of about 46% of GDP 800 Comfortable banking system capital 600 Banking system’s external debt maturity profile is spread out (bulk more than 2 years) 0 Ire lan d domestic banking system vis-a-vis euro area 200 M al ta Short-term net creditor position of 400 Sl ov ak ia Sl ov en ia adequacy of 11.4% and Tier 1 of 9.1% (June 2010) Fi nl an d Sp ai n G re ec e Fr an ce Au st ria Po rtu ga l Be lg iu Ne m th er la nd s Banking system’s cross-border 1200 an y third of EMU average er m Banking sector assets in GDP only one 1400 Ita ly 30% of GDP in 2008 and 33% in 2009 1600 G Lowest household indebtedness in EMU Source:IMF Banks have low exposure to toxic assets 18 823% 717% 388% 378% 375% 341% 326% 310% 310% 243% 226% 210% 151% 86% Cyprus Malta Netherlands Austria France Belgium Spain Germany Portugal Italy Finland Greece Slovenia Slovakia 0% 829% 2096% 50% Ireland Luxembourg Banking system still to catch up Total Assets of Financial Credit % GDP, 2009 500% 450% 400% 350% 300% 250% 200% 150% 100% Source: AMECO, ECB"EU banking structures" 19 Housing market: High owner occupation rate and low indebtedness Institutional mortgage market characteristics in euro area 90 80 70 60 50 40 30 20 10 Owner-occupation rate (2005) a ve ni Sl o ly Ita Au s tri a ce re e G Fr an ce d nl an Fi um Be lg i al ta M rg m bu Lu xe G er m an y ru s C yp in Sp a ga l Po rtu nd la Ire N et he rla nd s 0 Debt for house purchase-to-GDP ratio 2007 Source: ECB 20 Policy response to global financial crisis 21 Global financial crisis and collapse of trade Banking sector`s Loans to Non-Financial Corporations Sector, annual growth rate % 16 14 Exports of goods and services (annual % change) 40 20 35 15 30 10 12 10 8 25 6 20 4 5 0 15 -5 2 2002 2003 2004 2005 2006 2007 2008 2009 2010f 2011f 2012f 10 0 -10 5 -4 0 2005q01 2005q02 2005q03 2005q04 2006q01 2006q02 2006q03 2006q04 2007q01 2007q02 2007q03 2007q04 2008q01 2008q02 2008q03 2008q04 2009q01 2009q02 2009q03 2009q04 2010q01 2010q02 2010q03 -2 Slovenia (right axis) Source: ECB Euro area (left axis) -15 -20 Euro area (16 countries) Source: Eurostat Slovenia 22 External openness strongly affected growth and investment Gross fixed capital formation; Growth % (q/q-4) Euro area (16 countries) 2010Q3 2010Q2 2010Q1 2009Q4 2009Q3 2009Q2 2009Q1 2008Q4 2008Q3 2008Q2 2008Q1 2007Q4 25 20 15 10 5 0 -5 -10 -15 -20 -25 -30 Slovenia Source: Eurostat 23 Stabilization and gradual recovery in line with major trading partners Industrial production (excluding construction); Growth % (m/m-12) 110 105 100 95 90 85 Euro area (16 countries) Germany 2010M10 2010M09 2010M08 2010M07 2010M06 2010M05 2010M04 2010M03 2010M02 2010M01 2009M12 80 Slovenia Source: Eurostat 24 ja n m .00 a se j.0 0 p. ja 0 0 n m .01 aj se .0 1 p. ja 0 1 n m .02 aj se .0 2 p. ja 0 2 n m .03 aj se .0 3 p. ja 0 3 n m .04 aj se .0 4 p. ja 0 4 n m .05 aj se .0 5 p. ja 0 5 n m .06 aj se .0 6 p. ja 0 6 n m .07 a se j.0 7 p. ja 0 7 n m .08 aj se .0 8 p. ja 0 8 n m .09 aj se .0 9 p. ja 0 9 n m .10 aj se .1 0 p. 10 Gradual recovery to influence fiscal consolidation path Economic Sentiment Indicator 140 120 100 80 60 40 20 0 Euro area Slovenia Source: European Commission,DG Economy and Finance, Eurostat 25 The downturn also reflected in inflation trends HICP annual rate of change (%) 2,5 2,0 1,5 1,0 0,5 Euro area (16 countries) 2010M11 2010M10 2010M09 2010M08 2010M07 2010M06 2010M05 2010M04 2010M03 2010M02 2010M01 2009M12 0,0 Slovenia Source: Eurostat 26 Coordinated EU policy response to crisis…. Source: European Commission. Ameco 27 0 Luxembourg Bulgaria Czech Republic Slovakia Slovenia Denmark Finland Poland Spain Cyprus Netherlands Ireland Austria Malta Germany Portugal France Belgium Italy Greece …in line with existing debt levels General Government debt in % of GDP 2009 140 120 100 80 60 40 20 Source: Eurostat 28 Policy to safeguard jobs and economic potential Budgetary stimulus aims at limiting the impact of decline in external demand on productive capacity and jobs Three types of policy measures: slowing down the impact of the crisis on enterprises; enhancing enterprise financial liquidity and safeguarding existing jobs; increasing expenditure in research and education to improve the growth potential of the economy Budgetary policy economic support package in 2009 equivalent to 1.6% of GDP. Most of the measures of temporary nature Additional support to small and medium size enterprises in the form of borrowing guarantees of up to € 1.2 bn. 29 Preventive measures to ensure functioning of banking system in line with EU Financial system support measures include: Full retail deposit guarantee Guarantees for bank borrowing (€12 bn) up to 5 years, pricing according to EU/ECB guidelines On-lending to banks, insurance, reinsurances, pension companies Capital injections Purchase of claims (Banks) Measures other than deposit guarantee are subject to relevant supervisory institution’s endorsement Measures are being gradually phased out with normalization of financial markets and in accordance with EU decisions 30 Fiscal Consolidation and policy response Gradual fiscal consolidation over the past years 2009 deficit reflects strong economic downturn on tax revenue (automatic stabilizers) and discretionary policy to offset the impact of the crisis Fiscal policy to reduce deficit below 3% of GDP by 2013 General government deficit as % GDP and deficit structure in 2009 1 0,5 0 2003 2004 2005 2006 -1 2007 2008 -0,9 -1,4 -1,3 2009 -2,7 -2 -2,2 -3 -2,7 -1,6 Deficit Discretionary response Automatic stabilizers -4 -5 -5,5 -6 Source: Ministry of Finance 31 Stability Programme submitted to EU General government deficit to return into the scope of Maastricht criteria (3% of GDP) by 2013 General government deficit as % of GDP 2010 2011 2012 2013 0 -1 -2 -3 -4 -5 -6 Source: Ministry of Finance 32 Withdrawal of fiscal stimulus and consolidation 2011 adopted budget reflects full withdrawal of fiscal stimulus by the end of 2010; however, Slovenia will act in line with EU and EMU policies and recommendations. Gradual, primarily expenditure driven fiscal consolidation over the medium term. Deficit below 3% of GDP by 2013 — Rationalization and discontinuation of inefficient government programs — Rationalization of cost of public administration — Rationalization and better targeting of social transfers — Shifting investment financing towards EU funds — Increase in excises’ rates and widening social security contribution tax base Modernization and reform of pension system. 33 Financing Programme 34 2011 borrowing requirement Max. gross borrowing: 4.2 Bn. EUR Purpose of borrowing: — — Gross borrowing for 2011 central government budget: Pre-financing of debt due for redemption in 2012 and 2013: 2.9 Bn. EUR 1.3 Bn. EUR Already executed borrowing: — Pre-financing of part of 2011 repayments executed in 2010: 0.3 Bn. EUR Expected structure of borrowing at the end of 2011: — — Short term (end of the year) Long term 30 Ml. EUR Up to 3 Bn. EUR 35 Further government debt market integration Established issuer in the Euro debt market International structure of primary dealers with strong domestic institutions — Abanka; Barclays Capital; BNP Paribas; Crédit Agricole CIB; Commerzbank; Deutsche Bank; Goldman Sachs; HSBC; ING; Jefferies; JP Morgan; Nova Ljubljanska Banka; RBS; Société Générale CIB; UniCredit Banka Slovenija Newly issued bonds trading on major international trading platforms — — — MTS Slovenia (www.mtsslovenia.com), Bloomberg (SLOREP Govt <GO>), Bondvision Benchmark size issues to ensure liquidity (minimum € 1 bn) Bonds in new S&P Eurozone Government Bond Index MTS Slovenia established since March 2007 (www.mtsslovenia.com) — — Currently 17 system participants (14 international and 3 from Slovenia) 8 bonds on the system (http://www.mtsdata.com/content/data/public/rsl/bulletin/, http://www.mtsdata.com/content/data/public/rsl/fixing/) Broaden investor base to increase integration of Slovenia’s signature in the Euro area 36 Strong performance and support Name Ratings Size EUR mln Issue Date Maturity Cpn Bid Spr vs MS (at lunch) Dur (yrs) Slovenia 02/12 Aa2/AA/AA 1 05.02.2009 05.02.2012 4,25% 165 bps 1,1 Slovenia 04/14 Aa2/AA/AA 1,5 02.04.2009 02.04.2014 4,38% 160 bps 2,9 Slovenia 03/15 Aa2/AA/AA 1 17.03.2010 17.03.2015 2,75% 37 bps 3,9 Slovenia 02/16 Aa2/AA/AA 1,066 17.01.2005 17.02.2016 4,00% - 4,5 Slovenia 03/18 Aa2/AA/AA 1 22.03.2007 22.03.2018 4,00% -8 bps 6,1 Slovenia 02/19 Aa2/AA/AA 1 06.02.2008 06.02.2019 4,38% -3 bps 6,5 Slovenia 01/20 Aa2/AA/AA 1,5 26.01.2010 26.01.2020 4,13% 68 bps 7,2 Slovenia 09/24 Aa2/AA/AA 1,5 09.09.2009 09.09.2024 4,63% 80 bps 9,9 Source: MTS Slovenia, Bloomberg, 04 January 2011; Ministry of Finance Distribution by region UK / Ireland 11,5% Distribution by investor type Asia 0,2% Austria / Germany 29,2% Swiss 2,6% Supranational Other 0,8% 1,0% Pension Fund 6,4% Insurance Company 14,6% Slovenia 15,8% Scandinavia 5,6% Rest of the World 0,8% Other EMU 1,8% Italy 7,5% Bank 41,5% Benelux 9,4% Iberia 1,2% France 11,9% CEE 2,5% Fund Manager 32,4% Central Bank 3,5% 37 Strong relative performance in turbulent times Source: MTS. 38 Favourable state budget debt portfolio Stable debt service profile Most debt denominated in local currency Outstanding debt by type of currency (31.12.10) EUR: 99.7% USD: 0.0% Other: 0.3% Source: Ministry of Finance 39 Contact details Republic of Slovenia Ministry of Finance Treasury Directorate Boštjan Plešec Director General [email protected] Tel: +386 1 369 6410 Public Debt Management Department Marija Eber Head of Department [email protected] Tel: +386 1 369 6442 40