Senegal's international bonds climb on investor optimism over IMF deal

By Colleen Goko

JOHANNESBURG, Jan 5 - Investor optimism about the possibility of a new International Monetary Fund (IMF) lending programme drove Senegal's international bond prices higher, with prices rising by more than 2 cents.

Senegal's 2033 dollar bond led the gains, climbing 2.8 cents to trade at 62 cents on the dollar, marking its highest level in five weeks, Tradeweb data showed. The advance followed a sharp sell-off that pushed the bond to a record low on December 17. Senegal's euro-denominated bonds also rose more than 2 cents.

"Senegal had a difficult year in 2025, with bonds at levels that largely price in a restructure. However, a good bond auction on the regional market, and the prospect of an IMF visit in January has created some optimism," said Carmen Altenkirch, emerging markets sovereign analyst at Aviva Investors.

"If a credible (IMF) deal is done, and the government shows commitment to consolidation, then bonds could potentially go sub-10%, albeit we are still some way off from that," she added.

The yield on the 2033 bond stands at 15.979%.

SENEGAL TARGETS QUICK FINALIZATION OF IMF AGREEMENT

Bonds have been rising since December 30, when Finance Minister Cheikh Diba said the government plans to finalize an IMF programme "very quickly."

Addressing lawmakers, Diba stated that discussions are progressing "very well," with agreement already achieved on data corrections and further work ongoing on budget and debt issues.

The new IMF mission chief will begin their role in January.

"It's market optimism about an IMF deal, perhaps a holding operation that would not require a debt restructuring but would give time for Senegal to prove, or not, its ability to service its debt," said Charlie Robertson, head of macro strategy at FIM Partners.

The IMF has previously stated that Senegal's public debt hit 132% of gross domestic product at the end of 2024 after the current administration uncovered billions of dollars in previously unreported liabilities left by the former government.

The discovery saw the Fund freeze a $1.8 billion lending programme in 2024, forcing Senegal to rely heavily on regional debt auctions to meet its financing needs.