The Togolese State has mandated Sogebourse, a SGBCI Subsidiary Management and Intermediation Company (SGI), to pilot and arrange its bond issue launched in December 2017, much to the chagrin of SGI Togo, which would have applied with a better interest rate. Financial Afrik returns to the contours of a choice that is both strategic and binding.
Open from 20 December 2017 to 20 January 2018, the bond issue through a public offering launched by the Togolese State involves an amount of 60 billion CFA francs represented by six million of bonds a nominal value of 10 000 CFA each. Named “TPTG 6.90% 2018-2023”, it is, according to the issuer, the payment of arrears of domestic public debt and the mobilization of resources to finance the growth of promising projects.
“The bonds will be issued in the form of bearer dematerialized” -on bed in the Circular. “They must be recorded in an account held by an intermediary skill at the holder,” she says.
The enjoyment of the bonds is scheduled for January 26, 2018, otherwise the settlement date. Over a period of 5 years, repayment “will be by semi constant amortization of deferred without capital,” according to the Treasury, which sets the deadline to 26 January 2023, with sovereign guarantee of the State of Togo.
Sogebourse to the rescue, despite an excessive rate
To drive its borrowing, the state selected as arranger and leader, Sogebourse (which operates with Nsia Finance as co-arranger and co-leader), with an interest rate of 6.90% net year. Against the 6.5% would have offered SGI-Togo, whose new premises were inaugurated with great fanfare in late April 2016 the Togolese authorities.
Based in Abidjan, Sogebourse, approved in December 1997, is a subsidiary of Sgbci Group (Societe Generale bank in Ivory Coast), itself a subsidiary of the eponymous French banking group. “This choice is a good strategy to cover the amount sought,” said a financial analyst in Lome. “There are many banks behind Sogebourse which, incidentally, has a higher profile than the SGI Togo. But the real reason, cXCHARXest it can better manage subscriptions lXCHARXextérieur the country, “he concluded, while emphasizing the power of the SGI and its strong capacity for mobilization.
In fact, the SGI Togo operates with banks with strong national character: it is the case of the Togolese Union Bank (UTB) and the Togolese Bank for Trade and Industry (BTCI), two institutions wholly owned by the State, which announced merger slow to materialize. Moreover, the state has just completed the implementation of a new management team at the head of the first, with the Director General Zakari Darou Salim, former general of the Togolese Development Bank Director.
Moreover, given the current situation of the banks of the Treasury and the signing of Togo on the market, the country will need an IMS with significant underwriting guaranteeing at least the requested amount or more. The main objective is achieving a coverage rate of at least 100%, especially as the news is not rosy in the money market with bond issues and bonds.
According to ‘The New Tribune, a local publication, the State had a loan from Societe Generale to resolve a situation in December, after unsuccessful attempts with Orabank. “Wanting to make better use of his position, Société Générale have proposed Sogebourse as leader of the bond issue by public offering, with a rate of 6.90%,” the newspaper writes.
SGI Togo, arranger problem?
Created on 4 December 1996, SGI led Togo, current 2017, a bond issue by public offering of the Investment Bank of Development (EBID) quXCHARXelle struggled to buckle. After the transaction arranged jointly with CGF Bourse, the regional institution garnered only 26 billion CFA francs on 50 billion sought in the regional market, despite, among others, the long period called “incentive” to subscribe .
The rate of annual interest of 6.10% over a 10 year period. While with the characteristics of the bond, Togo had no room for error, and will get by with the amount requested. The risk that investors now back to its securities.
Yet the same consortium (SGI Togo and CGF Bourse) has successfully completed the previous bond issue of EBID, closed early March 14, 2014, with a subscription rate of over 145%. Amounting to 58 billion FCFA mobilized, against 40 billion FCFA solicited. The loan was subject to an interest rate of 6.5% net per year for a period of 7 years, including 1 year deferral for the repayment of capital.
Limited company with registered capital of 1.68 billion CFA francs approved by the Regional Council for Public Savings and Financial Markets (CREPMF) of the Economic and Monetary Union of West Africa (UEMOA) under number 0143 December 15 1997 SGI Togo has a shareholding made up of banks, insurance and reinsurance companies, financial institutions and private economic operators in the country.
From 1998 to 2016, the company has structured bonds totaling more than 545 billion CFA francs, more than 30% for the States. She has raised over 165 billion on the financial market of the WAEMU on behalf of the States of the Union, of which 96.3 billion FCFA for the Togolese State.
The aftermath of the Sukuk
Moreover, Togo had “fooled” with more than a Sukuk on which investors’ capital remained blocked for two years without coupons. With a rate of 6.5%, the operation launched in 2016 is for an amount of 150 billion CFA francs.
Sequelae coupled with the uncertainty of the current socio-political situation facing Togo, do not allow the choice of an IMS whose leadership is discredited.
