Senegal to issue $500 mln to $1 bln in international bonds

DAKAR, March 18 (Reuters) – Senegal plans to issue between $500 million and $1 billion in debt in international markets this year starting from June to cover its budget needs, an economic adviser to President Macky Sall said on Wednesday.

Mamadou Fall Kane said the West African country’s government was concerned by the strength of the dollar and would use currency swaps to hedge its exposure on dollar-denominated debt.

Senegal, a member of the eight-nation CFA currency bloc whose money has a fixed exchange rate with the euro, is also looking to increase its presence in European markets and could organise a European roadshow before the summer, he said.

“The president has said it will be a minimum of $500 million (in debt) and it could be as much as $1 billion. We will decide according to our needs at the time,” Kane told Reuters, adding the issuance would be made “starting from June”.

He said that an easing of the restrictions imposed by International Monetary Fund (IMF) on Senegal’s debt issuance would increase its ceiling for selling bonds on international markets this year.

Asked if Senegal would look to issue a Eurobond, or Sukuk debt as it did in June last year, he replied: “We may do a bundle of different products. We are not bound to one kind of instrument.”

Kane said the maturity on the debt could be five years for a $500 million bond but that in general Senegal was looking to place 10-year bonds for larger debt issues.

Senegal issued its first $200 million 5-year Eurobond in December 2009 at a yield of 9.25 percent. It followed that with a $500 million 10-year issue in 2011 at a coupon of 8.75 percent.

Last July, Senegal returned to the market with a $500 million, 10-year Eurobond at a coupon of 6.25 percent, which was several times oversubscribed.

Kane said the government had opened a tender for a currency swap to hedge $250 million of its previous Eurobond issuance, and it would look to do the same for any debt issued this year in dollars.

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