Creditors holding sovereign bonds issued by Senegal have started informal discussions about the possibility of creating a coordinated creditor body if the government elects to pursue a debt rework, according to Bloomberg News, which cited people familiar with the matter.
Those people named Morgan Stanley Investment Management and BlueBay Asset Management among bondholders that have recently talked about forming an ad hoc group. Sources told Bloomberg that the conversations are preliminary and that no formal decision has been reached on creating a grouping to represent bondholder interests.
Investors in Senegal’s sovereign bonds would need some form of committee or representative body to conduct negotiations with the government in the event that Dakar seeks a debt reorganization. Such a committee would serve as a focal point for discussions and for presenting creditor views during any formal negotiations.
Separately, the people cited said Senegal has been considering the engagement of an external financial adviser and has contacted several firms as part of that review. The firms that have been approached include Lazard, Rothschild & Co., and Alvarez & Marsal, according to the reports.
Officials have not taken a final decision on whether to proceed with any type of debt rework. That includes both more formal restructuring options and reprofiling of existing obligations. The decision on whether to move forward with any adjustments to the country’s debt profile remains pending.
Context and status
- Informal talks among bondholders are under way but remain at an early stage, without a formal commitment to form a creditor group.
- Major asset managers, specifically Morgan Stanley Investment Management and BlueBay Asset Management, were identified as participants in recent discussions.
- Senegal has explored hiring external advisers, contacting Lazard, Rothschild & Co., and Alvarez & Marsal, but has not decided to proceed with a debt rework of any kind.
What remains uncertain
- Whether bondholders will formalize an ad hoc committee remains unclear given the talks are still preliminary.
- It is not yet decided if the Senegalese government will pursue a restructuring or reprofiling of its debt obligations.
- The selection and appointment of any financial adviser have not been finalized despite initial contact with several firms.