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(Ecofin Agency) – The operation, fully subscribed by the American bank JP Morgan, aims to meet the financing needs of the 2024 budget following the suspension of disbursements under an IMF assistance program.
Senegal has raised $300 million on the international market by reopening an earlier Eurobond issued in June to help finance its 2024 budget, according to a statement from the Ministry of Finance and Budget on October 30.
The Ministry explained that this funding was secured through a private placement of bonds, which were originally issued in June 2024 and are set to mature in 2031. The entire transaction was fully backed by American investment bank JP Morgan, showing strong interest from international investors.
To manage currency risks tied to dollar fluctuations, Senegal also set up a hedge on this debt, which allowed the country to secure a favorable 6.33% interest rate. The Finance Ministry emphasized that this funding comes at a critical time, as expected disbursements from the International Monetary Fund (IMF) were delayed. An initial public finance audit revealed that the country’s debt and budget deficit were higher than the previous administration had disclosed, which increased the urgency for financial support.
The Senegalese government noted plans to initiate discussions with the IMF to create a new program. This program will aim to stabilize Senegal’s economic framework and support the development goals set by the new leadership.
In the initial bond issuance in June, Senegal had raised $750 million, split into two tranches of $500 million and $250 million, with a 7-year maturity and a 7.75% interest rate.
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