WAEMU Securities: Lomé Buys Back CFA17.5 Billion of Securities Close to Maturity

Public finance
Tuesday, 05 September 2023 19:09
WAEMU Securities: Lomé Buys Back CFA17.5 Billion of Securities Close to Maturity

(Togo First) - The Togolese Public Treasury recently bought back CFA17.511 billion of securities it issued on the WAEMU stock market. The operation was carried out on September, 1. The securities were set to reach maturity on October 9 and October 23, 2023.

The buyback recorded a 103% coverage rate, reflecting investors' willingness to liquidate their assets under the current conditions. The absorption rate reached 100%, which means that the Togolese State acquired all the securities offered.

The securities’ main holders were from Côte d'Ivoire, Benin, Burkina Faso, and, of course, Togo, where local investors have offered to return CFA2 billion to the State, via three-year fungible treasury bonds.

The operation, according to Lomé, is part of an active debt management strategy that capitalizes on a currently more favorable market to minimize financing costs and optimize short-term liquidity. The move, the Togolese authorities added, should also send a positive signal to the markets about Togo's economic resilience and stability. It is part of a wider strategy to reduce future borrowing costs and positively influence the perception of risk associated with the Togolese economy, which is expected to grow by 6.6% this year.

While some market players believe that it is too early to draw an objective analysis, the fact that the absorption and coverage rates exceeded 100% for the operation suggests a certain level of investor confidence in Togo's economic solidity.

"An absorption rate of 100% and a coverage rate of over 100% indicate that investors are ready to sell their securities, which could suggest a level of confidence in the country's economic solidity," the analyst who officiates at a brokerage company or SGI (Sociétés de Gestion et d'Intermédiation) told Togo First.

Between January and August of this year, Togo raised CFA530 billion on the WAEMU market, and it targets about CFA30 billion this month. Lomé has already repaid over CFA320 billion to its investors this year.

Fiacre E. Kakpo

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