How did Togo successfully proceed to the reprofiling of its internal debt?
mercredi, 09 juin 2021 12:29 
(Togo First) - In June last year, Togo said it completed the reprofiling of its internal debt, an operation started six months earlier. At the time, Moody’s, a rating agency, had declared that the debt reprofiling would cut the country’s debt service by around €130 million within the next three years. Now, a little more details explaining the reason for the success of the operation have filtered.
The first phase of the reprofiling was materialized thanks to a loan of €103 million (CFA67 billion), from Tokyo-MUFG, Japan’s biggest bank. The loan is to be repaid over 10 years, with a two-year grace period, at an interest rate of 4.68% per year.
Fully guaranteed by the Africa Trade Insurance Agency (ATI), the loan helped repay, by anticipation, an outstanding debt of CFA21 billion contracted by the BOAD, a regional lender, at a rate of 7.5% and a residual maturity of 3.5 years. The same loan was used to pay CFA44 billion of a syndicated loan, with the same residual maturity, contracted on the regional money market. The loan, which was to be reimbursed at an interest rate of 6.9% per year, was arranged by Sogebourse.
The second phase of the reprofiling is the fruit of a financing arranged by Société Générale. Secured in June 2020, the facility - a loan of €147 million - is to be repaid over 10 years with a two-year grace period, at an interest rate of 4.54% per annum. Guaranteed again by ATI, the loan was used to repay, in advance, two loans totaling CFA18 billion, owed to the BOAD, and another owed to Ecobank. Regarding the latter, the country owed the bank CFA72.4 billion.
In all, the reprofiling strategy allowed Togo to mitigate the refinancing risk by extending the average maturity of its portfolio from 5.1 years at the end of 2019, to 7 years in 2024.
