For its second outing (on January 12, 2021) on the international capital market after that of 2019, the State of Benin has issued one billion euros (656 billion FCFA) eurobonds in two tranches with the following characteristics.
|
Tranches |
Amount invested (in euro) |
Maturity (years) |
Interest rates |
Amount subscribed (in euros) |
Coverage rate |
|
1 |
700 millions |
11 |
4,875% |
1900 millions |
271% |
|
2 |
300 millions |
31 |
6,875% |
1200 millions |
400% |
Source: AJEB from data on the Benin government website.
The resources raised should be used to finance, among other things, the partial repurchase of the first eurobond worth 500 million euros (placed in 2019).
Given the country's historical performance on the local and international markets, this new operation should enable the country to improve the weighted average cost and average maturity of its debt portfolio and, moreover, limit refinancing risks.
The first 7-year Eurobond is redeemable over the last three years (2024, 2025 and 2026) and offers a coupon of 5.75%. In 2020, Benin's 10-year issues (longest maturity) on the WAMU government securities market serve an interest rate of 6.50%.
However, this mobilization of CFAF 656 billion comes at a time when the 2021 management finance law provides for CFAF 1102.3 billion in financing resources, including CFAF 176.1 billion in external resources, which allows us to formulate the following hypotheses :
- the State of Benin could reduce the domestic debt (913.3 billion FCFA) planned for 2021, the cost of which is expected to be higher,
- or he could instead prepay other outstanding debt,
- he could also make a combination of the two preceding hypotheses.
It should be noted that the 2021 Budget Act estimated the amortization of external and domestic loans to be made in 2021 at FCFA 146.4 billion and FCFA 517.7 billion, respectively.
CJEA