3 Issuing costs of state guaranteed bonds - Financial Risk and ...

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Annex 1 Eligibility criteria for state guarantees A1.1.11 Slovenia 34 Implementation date of scheme 4 December 2008 End date of entry into scheme 30 June 2010 (extended from 12 June 2009) Fee for instrument Fee for short term (less than 1 year) instruments: 50 bps Fee for medium term (between 1 and 5 years) instruments: (i) for banks with CDS data the fee is the median value of the 5-year CDS spread over the period 1 January 2007 to 31 August 2008 plus 50 bps; (ii) for banks without CDS data or representative CDS data, but with a credit rating, the fee is the median value of the 5-year CDS spread during the above mentioned period for the rating category of the banks concerned, based on a representative sample of euro area large banks plus 50 bps; (iii) for banks without CDS data and without credit rating, the fee is the median 5 year CDS spreads over the same period for the lowest rating category plus 50 bps; (iv) for guarantees for covered bonds, the fee is the institution's CDS spread and the add-on fee of 50 bps, which can be decreased by the Slovenian authorities. 130 The CDS element is set at 25 bps for AAA-rated institutions, 40bps for AA, 45 bps for A, 50 bps for BBB, 55 bps for BB and below - as regards, the credit institutions with a rating category of A and below, the corresponding element may be adjusted by the Slovenian authorities, depending on the rating of the State itself. Maximum tenor 5 years Institution criteria Credit institutions incorporated in the Republic of Slovenia (including the Slovenian subsidiaries of foreign financial institutions) that are solvent. Instrument eligibility Instruments that can be covered by the guarantee are all liabilities with exception of structured financial instruments, subordinated liabilities and liabilities versus parent companies or other 34 For details see: http://ec.europa.eu/competition/state_aid/cases/228071/228071_906825_3_1.pdf; http://ec.europa.eu/eu_law/state_aids/comp-2009/n651-09-en.pdf.
Annex 1 Eligibility criteria for state guarantees related entities, which have a maturity longer than 90 days but less than five years. The scheme excludes all liabilities that qualify as either Tier 1 or Tier 2 capital. The scheme is not subject to any currency restrictions. The applying institutions have to submit information regarding the size of maturing liabilities and explanation on what actions have been undertaken by the institution itself to obtain the financing on the markets. In addition, the institutions have to explain the hypothetical consequences of not receiving the State guarantee. Instruments guaranteed under this scheme may be issued within 6 months following this decision. The Slovenian authorities have committed that they will notify any extension of the entry window into the scheme to the Commission. Scale of scheme €12 billion 131
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Economic Papers are written by the
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Wherever possible London Economics
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Contents Page Annex 4 Results of di
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Tables, Figures & boxes Page Table
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Glossary vi Glossary BGN Bloomberg
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Executive summary Member States (Cy
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1 Introduction 1 Introduction 1.1
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1 Introduction 1.4 Research questi
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1 Introduction analysis of the lat
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2 Overview of state guarantee sche
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Page 86 and 87: 4 Impact of state guaranteed bonds
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Page 116 and 117: 5 Key empirical findings and polic
Page 118 and 119: References Acharya V.V. and Sundara
Page 120 and 121: Lando, D. (1997). 'Modeling Bonds a
Page 122 and 123: Annex 1 Eligibility criteria for st
Page 140 and 141: Annex 2 Comparison of SG and non-SG
Page 142 and 143: Annex 2 Comparison of SG and non-SG
Page 144 and 145: Annex 3 Analysis of missing issuin
Page 156 and 157: Annex 3 Analysis of missing issuing
Page 158 and 159: Annex 3 Analysis of missing issuing
Page 160 and 161: Annex 4 of diagnostic tests of issu
Page 162 and 163: Annex 4 of issuing cost model Figur
Page 164 and 165: Annex 5 -over model Annex 5 Results
Page 166 and 167: Annex 5 -over model Figure 25: Anal
Page 168 and 169: Annex 6 Availability of bank data A
Page 170 and 171: Annex 6 Availability of bank data T
Page 176 and 177: Annex 7 Linking Bloomberg and Banks
Page 178 and 179: Annex 8 Investigation of estimation
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