Senegal aims for deal with official creditors and bondholders by December, sources say

Senegal ‌aims for ​an agreement in principle with its official lenders and bondholders by December, three sources said on Tuesday, two years after the emergence of misreported debt ‌that analysts estimate totals $13 billion. The West African country, which said last month it would seek debt "treatment" under the G20's Common Framework, made the comments during its first call with investors to outline its debt treatment plans, the sources ‌told Reuters.

It also said it would seek a "constructive contribution" from the 1 trillion CFA francs ($1.72 billion) ‌outstanding in total return swaps (TRS). The closely watched TRS, derivative contracts that Senegal used to raise financing which are backed by CFA franc government securities, are largely untested in restructurings.

A government presentation named three counterparties, First Abu Dhabi Bank, Africa Finance Corporation and Société ⁠Générale, for its ​TRS instruments, the sources ⁠said. Neither the banks nor Senegal's finance ministry immediately commented when approached by Reuters.

Senegal has made clear that CFA franc-denominated debt ⁠is not in the scope of the treatment, but the IMF classifies TRS as external debt because the creditors were ​non-residents. In a presentation made during the call and seen by Reuters, the government also said it ⁠had met official creditors, bondholders and banks holding non-bonded debt late last month, and that the latter group had formed a committee ⁠to ​coordinate their negotiations during the restructuring.

As part of the "enhanced" Common Framework, Senegal is also targeting parallel talks with the private sector and official creditors, as well as information sharing between the parties, according to the ⁠presentation. Previous Common Framework restructurings in Ghana and Zambia, which involved sequential creditor negotiations, took longer than anticipated.

The committee representing ⁠Senegal's bondholders also ⁠spoke during the call, two sources said, and said that group members' holdings represented $2.2 billion in face value - compared with total outstanding bonds of some $5.2 billion. ($1 = 581.0000 CFA ‌francs)