The financial operation is an issue by auction of e Treasury bonds with a maturity of three years.The State of Senegal, through the General Directorate of Public Accounting and Treasury, collaborated on November 5 with the UMOA-Titres Agency and the Central Bank of West African States (BCEAO) to obtain these funds and participate in “the coverage of financing needs for the year 2021,” the Ministry of Finance and Budget said in a statement shared with APA on Monday.
The bids received amounted to 135.1 billion CFA francs, a coverage rate of 270 percent. In the end, Senegal retained CFAF 55 billion with a weighted average yield of 3.59 percent. This is the “best rate so far achieved on the regional market of public securities of UMOA (West African Monetary Union) for the maturity of three years,” says the document.
The Ministry of Finance and Budget indicates that this percentage is “down 1.82 percent, compared to the weighted average rate of 5.41 percent recorded during the previous intervention of similar maturity carried out on 26 February 2021.”
This is due to the fact, he adds, that investors outbid each other with an overbid on the price to be retained with lower yields than the one (5 percent) offered by the issuer. “All subscriptions retained or not were made without discounting the price,” the statement said.
In addition, the Ministry of Finance and Budget explains this downward trend by the efforts of repositioning the rate curve accomplished by the General Directorate of Public Accounting and Treasury.
These actions follow the financial rating in local currency established by Bloomfield (rating A-, i.e. low risk) in the long term with a stable outlook, and rating A2 in the short term with a stable outlook.
All in all, the Ministry of Finance and Budget is pleased to say, these results reflect the renewed confidence of investors in the quality of the signature of the State of Senegal, which continues to position itself as a benchmark issuer on the regional market of public securities in UMOA.