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UPDATE 1-Slovenia may issue bond in March,offers loan guarantees

Published 02/12/2009, 11:31 AM
Updated 02/12/2009, 11:32 AM

LJUBLJANA, Feb 12 (Reuters) - Slovenia could issue another bond in March if necessary to boost liquidity of its banks, Finance Minister France Krizanic said on Thursday, following its 1 billion euro ($1.28 billion) bond issue in January.

The government also said it would offer state guarantees for bank loans to companies in the value of 1 billion euros in order to increase banking credit activity.

"If there will be need we will go into a new (bond) project in March but if it will show that banks alone can gain assets on the interbank market then we will probably end with big issues," Krizanic told a news conference.

"We will be very flexible," he said, adding the proceeds from the bond would mainly be spent on bank deposits and loans to banks in order to improve the liquidity of the Slovenian financial sector.

The government said earlier it was considering another syndicated bond issue of 1 billion euros this year but did no specify the likely maturity of the bond.

The government also said on Thursday the offered guarantees for bank loans to companies should increase liquidity of the Slovenian companies, many of which are suffering from the effects of the global financial crisis.

"In this way risks in the system would fall, banks would be safer ... when giving loans to companies and so short-term liquidity which is sufficient could move into companies," Minister of Development and European Affairs Mitja Gaspari told the same new conference.

Slovenian joined the European Union in 2004 and adopted the euro in 2007.

(Reporting by Marja Novak and Manca Ulcar, Editing by Ron Askew)

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