Structure of Senegal’s issues on the public securities market: Factors for improvement

Senegal raised 157 billion FCfa last Friday on the Public Securities Market. The particularity of this operation is a massive return from investors on 3 and 5 year bonds. Financial analyst Same Mbaye deciphers the factors “for an end to the crisis”.

On September 25, 2026, the State of Senegal requested the regional financial market of the West African Monetary Union (Umoa) for an amount of 150 billion FCfa, through a simultaneous issue composed of Assimilable Treasury Bonds (Bat) at 364 days and Assimilable Treasury Bonds (Oat) at 3 and 5 years. The operation attracted a total amount of bids of 157.89 billion FCfa, or a coverage rate of 105.26%. For the financial analyst and trader, Same Mbaye, this operation contrasts sharply with that of August 28, 2026 (before agreement with the IMF), during which the Treasury auctioned 70 billion FCFA. The submissions had, he explains, reached a level higher than the amount sought, but only 77 billion FCFA were ultimately accepted, i.e. an absorption rate of 67.65%. This difference between the volume of offers and that of the amounts retained reflects a greater selection of proposals presented by investors. However, in the eyes of the expert, the analysis of yields sheds light on this situation. Because on August 28, the weighted average returns stood at 7.85% for the Bat, 7.77% for the 3-year Oat and 8.24% for the 5-year Oat. “The Treasury could thus favor offers compatible with the financing conditions sought and rule out certain proposals with higher yield requirements. However, it is appropriate to present this mechanism as a selection of offers according to price and performance conditions, rather than asserting that all the rejected offers were necessarily “too costly” for the State,” maintains Same Mbaye.

A situation that relaxes

Continuing his analysis, Same Mbaye estimates that the situation is improving since the auction of September 11, 2026. For an amount put up for auction of 100 billion FCfa, the bids reach 109.02 billion, while 101.34 billion are retained, i.e. a coverage rate of 109.02% and an absorption rate of 92.96%. This development, considers the financial analyst, reflects an improvement in the adequacy between the conditions proposed by the Treasury and the requirements of investors, even if it does not make it possible, on its own, to establish precise causality. The important contextual element which intervenes between these different auctions according to him is the technical agreement with the IMF. The envisaged program aims in particular to restore macroeconomic stability and debt sustainability, reduce fiscal and external vulnerabilities and strengthen public finances. “However, the agreement remained subject to several conditions, in particular the approval of the Management and the Board of Directors of the IMF. In this context, the IMF announcement can be considered as a factor likely to improve investor visibility on the economic policy framework, but it would be excessive to directly attribute the improvement in auctions to this event,” says Same Mbaye. According to him, the chronology is compatible with this hypothesis, but it does not allow, on its own, to establish a causal relationship. Other factors may also be involved. These include interest rate expectations, investor liquidity needs, portfolio allocation strategies and general regional market conditions.

Appetite for the long term

On August 28, 2026, recalls Same Mbaye, 3 and 5 year Oats already represented approximately 68.3% of the amounts retained. This proportion reaches 75.5% on September 11, 2026, then 89.7% on September 25, 2026. According to him, it is therefore not a question of a sudden shift from a preference for Bar to Oat, but rather of a gradual strengthening of demand and allocation in favor of long maturities. “On September 25, of the 157.89 billion FCfa of successful bids, the Oat represented nearly 141.62 billion FCfa, against 16.27 billion FCfa for the Bat. The 3-year Oat alone concentrates 96.74 billion FCfa, or approximately 61% of the total amount retained,” he indicates. According to his reading, the dynamic is therefore particular because the coverage rate decreases, going from 162.60% on August 28 to 105.26% on September 25, but at the same time the absorption rate increases sharply, from 67.65% to 100%. “This combination is particularly interesting. It means that, on August 28, the Treasury had received many offers but had only accepted part of them, while on September 25, the amounts proposed were closer to the financing need and were accepted in full,” adds Same Mbaye.

He believes that the auctions between the end of August and the end of September 2026 suggest a strengthening of investors’ appetite for Senegalese public securities, particularly long maturities. This development can be explained by the yields offered, rate expectations and the announcement of the program envisaged with the IMF. However, indicates Same Mbaye, it does not in itself constitute proof of lasting confidence in the budgetary trajectory. For him, budgetary consolidation must reconcile debt sustainability, financial credibility, social protection and support for growth.

Demba DIENG