SLOVENIA Law and Practice Contributed by: Markus Bruckmüller, Klemen Radosavljević and Matej Kraner, Wolf Theiss Attorneys-at-law
1. Market 1.1 Major Lender-Side Players
notable resilience and retains the capacity to support both large-scale and mid-market buyout transactions, provided that suitable opportuni- ties arise. The cost of debt in LBO financings remains sensitive to macroeconomic conditions, fluctuating in response to changes in interest rates, investor sentiment, and broader geopo- litical developments, including uncertainty in global trade policy.
International and national credit institutions are the main providers and brokers of acquisition financing in Slovenia. Slovenian banks often provide financing to small and medium-sized enterprises (SMEs). In 2024, the Slovenian bank- ing sector, comprising eight commercial banks, three savings banks, and branches of foreign banks, saw an increase in total assets, indicat- ing a strong financial infrastructure supportive of both corporate and household sectors. In recent years, Slovenia has experienced significant con- solidation in the banking and investment sec- tors – in 2021, Hungary’s OTP Bank, which had acquired SKB banka in 2019, acquired Nova KBM (combining the previously separate Nova KBM and Abanka). NLB d.d. acquired the Slove- nian subsidiary of Sberbank. Nova KBM merged with SKB banka, and was renamed OTP ban- ka d.d. in 2024. Consolidation is expected to improve the competitive landscape in the Slo- venian market, including the competitiveness vis-à-vis international lenders, which could lead to a potentially more diverse range of financial services being offered to clients. However, due to the uncertain macroeconomic environment, credit institutions have become more cautious about granting large amounts of debt. Non-bank lenders, such as private debt funds, are expect- ed to bridge the shortfall by providing more ver- satile financing for transactions that are difficult to finance using traditional funding sources. 1.2 Corporates and LBOs The Slovenian market for corporate leveraged buyout (LBO) financing broadly mirrors prevail- ing trends across Europe, with leveraged loans continuing to serve as a key instrument in facili- tating M&A. Despite periods of market volatility in recent years, the sector has demonstrated
2. Documentation 2.1 Governing Law
Choosing foreign law as the applicable contract law is generally permissible, even if the contract is to be enforced in Slovenia. While English law is the default choice for large cross-border acquisition finance transactions, in recent years, Austrian or German law have become more common for transactions involving a Slovenian target, particularly following Brexit. More mod- est acquisition financings tend to be based on standardised loan agreements used by local or regional banks and governed by Slovenian law. Corporate loans to Slovenian borrowers would usually be governed by Slovenian law. It is standard practice for security interests over assets located in Slovenia or provided by Slove- nian-based transferors or pledgors to be docu- mented in security documentation governed by Slovenian law. 2.2 Use of Loan Market Association (LMA) Agreements or Other Standard Loans For international syndicated loans, the recom- mended LMA forms are usually used, although syndicated loans are still not as common among Slovenian banks. In contrast, documentation for smaller domestic transactions tends to be short-
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