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Benin bond sale draws scrutiny as Togolese investors take entire $165mn issue

Man pushing truck with gallons of water in Benin. Photo by Dananjaya Nugraha @ Unsplash
Man pushing truck with gallons of water in Benin. Photo by Dananjaya Nugraha @ Unsplash
  • Entire bond issue taken up by investors from neighbouring Togo
  • Deal structure raises questions over competitive auction process

 

COTONOU, BENIN – Benin raised 100 billion francs CFA ($165 million) in a regional bond auction fully absorbed by investors from neighbouring Togo, an outcome that is raising eyebrow over the transaction.

The West African country offered three maturities – four, six and 10 years – at an auction held Tuesday on the regional market of the West African Economic and Monetary Union, known by its French acronym UEMOA. Total bids reached 117.8 billion francs CFA, translating into a coverage ratio of 117.8%, according to figures published by UMOA-Titres, the region’s sovereign debt management agency.

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