How did Mali manage to successfully return to the securities market?

By Nadoun Coulibaly
Posted on Thursday, 8 September 2022 12:32

Central Bank of Mali headquarters in Bamako © Joe Penney/REUTERS

Launched on 15 August, Mali's bond issue has exceeded its target by raising 207.5bn CFA francs (€316m). Investors now feel more confident following this second success on the securities market.

Encouraged by its successful return to the regional financial market, Bamako has once again managed to attract regional investors and exceed its target by raising CFAF 207.5bn. The country planned to raise CFAF 200bn with a 10-year maturity to finance infrastructure and development projects included in the government’s 2022 budget.

Scheduled to run from 15 to 31 August, the operation – which was arranged by SGI Mali, a stockbroker on the regional securities exchange (BRVM) – consisted of issuing 20 million bonds with a face value of CFAF 10,000 (€15) each, payable in one go.

Appetite for sovereign debt

The bond eventually reached a subscription rate of almost 104%. “Amid a rather difficult political and economic context, we can say that the market welcomed this bond issue. Our financial market proves that it has a great appetite for sovereign debt, and has renewed its confidence in the Malian Treasury which, over three weeks, has made a remarkable exit both in regards to the UMOA-Titres and bond market”, says Lamine Bane, head of CIFA, the operation’s co-arranger.

This confirms that investors have restored confidence in the Malian state as well as in the policy formulated by the authorities in power, said the Ministry of Finance, headed by Alousséni Sanou. At the beginning of August, Bamako had already signalled its return to the WAMU securities market, raising 277.371bn CFA francs, above its target of 270bn.

Arrears of payment

This amount was used to clear the debt arrears. Christian Zegbe Kouamé, a financial analyst, explains that this “Malian success” was achieved because the country was able to restore the confidence of market investors, even though Mali’s rating had been downgraded following the Ecowas-imposed embargo – which was lifted on 4 July.

“Mali has started to repay creditors and cover arrears, which has given investors confidence. It is also positive to see that the operation has demonstrated a surge of regional solidarity. There were subscribers from all the Union’s countries,” says Kouamé.

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