Investors holding Senegal’s dollar-denominated sovereign bonds face the prospect of severe losses, with Citigroup estimating that recovery rates in a potential restructuring could fall below 50%.
The bank’s assessment highlights the mounting pressure on the West African nation’s debt sustainability as it moves toward a new International Monetary Fund program.
For bondholders, the prospect of a haircut exceeding 50% represents a material risk to capital preservation.
The warning comes as Senegal’s public debt burden approaches 132% of GDP, a level that has constrained fiscal flexibility and increased reliance on external financing.
The country has signaled willingness to engage in negotiations with creditors, but the path to a sustainable debt profile remains fraught with challenges.
The IMF program is expected to provide critical support, but it will likely require significant fiscal adjustments and debt relief.
For bondholders, the prospect of a haircut exceeding 50% represents a material risk to capital preservation.