DAKAR, Sept 14 – Senegal raised 101 billion CFA francs ($179 million) through a government securities auction on Friday, its first domestic debt sale since announcing plans to seek a new treatment of its external obligations.
The government had offered 100 billion CFA francs of securities and received bids worth 109 billion CFA francs, according to regional debt agency UMOA-Titres. Authorities accepted almost all of the offers, suggesting that Senegal’s debt treatment plans have not yet resulted in a significant repricing of its regional debt.
The latest auction also marked a larger financing effort than the previous sale on August 28, with the amount offered increasing by about 43%. Despite the higher issuance target, investor demand remained relatively strong and borrowing costs were broadly stable.
The yield on Senegal’s five-year securities declined to 7.89%, compared with 8.24% at the previous auction. Average yields stood at 7.87% for one-year Treasury bills and 7.75% for three-year bonds.
Senegal has increasingly relied on the regional debt market to finance government spending after the International Monetary Fund suspended a $1.8 billion financing programme following the discovery of billions of dollars in previously undisclosed borrowing.
After extended discussions with the IMF, Dakar opted to pursue what it describes as a “debt treatment” rather than a conventional restructuring. The government has indicated that the process could involve extending debt maturities and renegotiating interest rates to ease financing pressures.
On September 1, Senegal announced that it would proceed with debt treatment under the G20 Common Framework as part of a new $2.2 billion IMF programme.
The government has also said that debt denominated in CFA francs will be excluded from the restructuring process, leaving the focus on eligible external obligations.
The relatively stable performance of the latest auction provides an early indication that investors in Senegal’s regional debt market have so far absorbed the government’s debt treatment plans without a sharp increase in required yields. The response will remain important as Dakar seeks to maintain market access while negotiating with external creditors.
