Togo to issue its second 15-year bond on the WAEMU market next month

Public finance

Thursday, 24 February 2022 16:48

Togo to issue its second 15-year bond on the WAEMU market next month

(Togo First) - After completing its first 15-year bond issue in November 2021, the very first on the regional financial market, Togo will carry out a similar issue again on March 4, 2022. The operation should allow the Treasury to secure CFA30 billion.

In detail, Lomé will issue three million securities with a nominal value of CFA10,000 CFA, at a rate of 6% per year. Interest payment will begin next year and the principal will be repaid in March 2037.

It is worth noting that so far only Togo and Senegal have carried out such long-term issues on the WAEMU market; even if more countries are opting for these types of loans. However, Togo’s upcoming issue has an interest rate down by 30 basis points compared to the one it carried out last November, or the one Senegal carried out in December and which had an interest rate of 6.15% per year.

Over the past four years, Togo has been relying heavily on the regional money market to meet its growing needs. This year, the country expects to secure CFA550 billion (against CFA557 billion in 2021) on this market, to finance its CFA1,779 billion budget. So far into the year, it has raised about CFA100 billion via three issues.

“The present issue of Assimilable Treasury Bonds in all member states of the West African Monetary Union (WAMU) aims to mobilize the savings of natural and legal persons to meet the financing needs of Togo’s budget,” said the WAMU-securities agency.

In Togo, income generated by fungible Treasury bonds is tax-exempt for local investors whereas non-residents are subject to the tax system applicable in their country of residence.

As a reminder, Togo’s outstanding debt on the WAEMU market was standing at CFA 1,537 billion at the end of December 2021, while the country’s public debt hovered around 59% of its GDP, or CFA 2,768 billion, at the end of June 2021.

Fiacre E. Kakpo

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