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jeudi, 18 juin 2020 16:14

Togo towards the Active Debt Management Strategy

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«  The  Ministry  of  Economy  and  Finance  of  the  Togolese  Republic  is pleased to announce the signature in May 2020 of a second euro loan facility  raised  on  the  international  markets  for  an  amount  totaling approximately  150  million  euros. 

 

This transaction  reflects  the  Togolese government’s  strategy  to  reprofile  certain  domestic  debts  over  longer maturities and at improved financial conditions . It benefits from a 100% insurance  cover  by  the  Africa  Trade  Insurance  (ATI),  of  which  Togo became a member in 2019. With a 10 year maturity and an overall cost of approximately 4.5%, this transaction demonstrates Togo’s credit quality as an international borrower, notably in this period of high volatility and investors’ increased risk aversion.

This second domestic debt reprofiling transaction, arranged by Société Générale, has been concluded, as the first one closed at the end of last year, in full compliance with the Togolese Republic’s commitments under its program with the IMF. It will result in a debt service reduction over the next three years of more than 80 million euros, in addition to the approx.

50 million euros debt service reduction resulting from the  reprofiling transaction closed in December 2019.

The  liability  management  strategy  implemented  by  Togo  in  these  two transactions has resulted in the raising of more than 250 million euros on the  international  markets  over  10  year  maturities  and  at  interest  rates ranging between 4,5% and 4,75% and in the prepayment of short term domestic commercial debts with interest rates between 6.75% and 7.6%.

This  successful  strategy  positions  Togo  as  a  referenced  borrower  on the  international markets, improves the country’s debt sustainability as required by the IMF and results in substantial debt service savings this year and over the next two years.

This strategy, together with the G20 debt service suspension initiative, will provide Togo with fiscal and liquidity room for maneuver to address the sanitary, social and economic crisis it is facing as many other countries in the world.

The  Togolese  Republic  has  been  advised  by  Lazard  Frères  for  this transaction. »  

Lu 352 fois Dernière modification le jeudi, 18 juin 2020 16:27

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