Croatian government budget to GDP ratio in 2Q 2019 was in surplus and it has amounted to 2.5% of GDP. Slovenia has achieved somewhat lower budget surplus of 1% of GDP, a decrease of 10 bp YoY. As a comparison, EU government budget was in deficit of 0.9% of GDP while in Eurozone deficit stood at 0.7%.

Croatian government deficit in 2Q 2019 was in surplus, amounting to 2.5% GDP. This is in line with seasonality of public incomes, since revenues tend to peak around penultimate quarter. On the annual level we expect public budget to be roughly balanced but announced hikes of public wages might set the stage for series of some quarterly deficits. Public debt in second quarter decreased slightly by 30 bps YoY to 76.4% GDP. A slight decrease could mainly be attributed to the seasonality of Croatian economy and high reliance on tourism. As we expect another record tourist season, we see the public debt to remain firmly on a decreasing path, and we see it falling further by the end of 2019.

Croatia Public Debt & Public Deficit (% GDP)

On the other hand, Slovenia has in Q2 achieved somewhat lower budget surplus of 1% GDP, a decrease of 10 bps YoY. This trend is expected to continue and on the annual level small budget surplus is expected. Public debt has decreased by 5.2 p.p. to 67.7% GDP driven by higher economic activity and decrease in nominal amount of debt to EUR 31.8 bn. Public debt is expected to decrease further and to reach 66% GDP by the end of 2019 driven by favorable economic cycle and loose monetary policy.

Slovenia Public Debt & Public Deficit (% GDP)

The aggregate principal amount of the subordinated notes is EUR 75m.

Sava Re published a document on the Ljubljana Stock Exchange announcing that they adopted the decision to issue subordinated notes with the following key features:

• The aggregate principal amount of the subordinated notes is EUR 75m (issued in the denomination of EUR 100,000) 
• Unless previously redeemed by the issuer, the notes will be redeemed at par on 7 November 2039
• The notes will bear interest rate during the first 10 years at a fixed rate of 3.75% p.a.; afterwards the notes will bear interest at a floating interest rate based on the sum of the 3-month Euro Interbank Offered Rate and the margin of 4.683% (equal to the original issue spread 368.3 plus 100 bps step-up);
• The prospectus will be published on the Luxembourg Stock Exchange and website of the Issuer on the issue date.

Sava Re will inform further about the outcome of the offering on 28 October 2019.