Slovenia swats away market fears
* Huge demand for sovereign's bond deal
* Slovenia still offers value
* Investors hail banking reforms
By Sudip Roy
LONDON, Feb 12 (IFR) - Slovenia showed that fears that investors are abandoning emerging markets assets are nonsense after generating more than USD16bn of orders for a dual-tranche US dollar bond deal on Monday.
While recent headlines have screamed about crises in Turkey, Ukraine and Argentina, Slovenia showed that not all emerging markets should be placed in the same bracket after recording an order book that was almost half the size of its GDP.
The peak level of demand hit USD18.5bn despite this being the Balkan country's third multi-billion dollar transaction in less than 18 months - an illustration of how much cash investors in the dollar market are able to deploy. While retail funds and some hedge funds are struggling with redemptions, most real-money accounts have excess liquidity and are more than willing to invest in the right credit.
The USD3.5bn offering raised through new five- and 10-year notes also demonstrated the continued resurgence of peripheral eurozone sovereigns, led by Spain and Italy, which have both seen their 10-year bond yields compress by more than 50bp since the turn of the year.
Patience was the key for Slovenia, which waited more than a week after completing investor meetings in the US and Europe before going ahead with the transaction. Continuación...