Senegal bondholder group says debt treatment must be fair, sustainable

NAIROBI, Sept 11 (Reuters) - Senegal's newly formed bondholder group said on Friday it will push for a debt treatment that is fair, sustainable and underpinned by credible economic assumptions and policy commitments.

The bondholder group's stance sets the stage for what could be drawn-out negotiations over how losses are shared among Senegal's creditors.

The outcome will test the G20's Common Framework debt restructuring process since Senegal has said it will use an "enhanced" version of the initiative.

The West African nation itself said last week it would reorganize its debt, excluding those denominated in the regional CFA franc currency, after ⁠reaching a staff-level agreement with the International Monetary Fund on a $2.2 billion, three-year loan programme.

Reuters first reported the formation of the creditor group on Wednesday. In its first statement since forming, the group confirmed that White & Case will be its legal counsel.

Known as the ad hoc group, it will push to ensure the debt treatment will be "economically justifiable, equitable and sustainable, and is based on reasonable economic assumptions which incorporate appropriate adjustment efforts," the bondholders said in a statement.

"It will be essential that the authorities work collaboratively with all stakeholders, including bondholders, to ⁠ensure the burden is fairly spread across Senegal's financial creditors in accordance with best international practice," they added.

The group did not give details of its members or holdings in the bonds.

White & Case has advised governments including Ethiopia and Ukraine in debt restructurings, and has also advised creditor groups in Lebanon ⁠and Sri Lanka.

Senegal's government has committed itself to "a compressed implementation timeline, early and enhanced information sharing and parallel consultations with creditors" while reworking its debts under an "enhanced" Common Framework.

The G20 Common Framework is a ⁠debt restructuring process launched in 2020 to help low-income countries overhaul unsustainable debt burdens. The process has been criticised for taking too long in cases like that of Ethiopia.

Senegal ⁠tumbled into a financial crisis in September 2024 after a new government said it had uncovered billions of dollars in debt misreported by the previous administration, prompting the IMF to suspend the country's $1.8 billion lending programme.

Reporting by Duncan Miriri; Editing by Hugh Lawson

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