BOAD TITRISATION launches a FCFA 150 billion operation

Interview with Ms Adji Sokhna Mbaye, Managing Director of BOAD TITRISATION, arranger of the operation, and Mr ETSE, Managing Director of SGI TOGO, co-leader of the Syndicat de Placemen

Ms Adji Sokhna Mbaye

Securitization is a financial process whereby a portfolio of receivables is transferred to a fund (FCTC), which issues securities backed by these receivables and sells them to investors, hence the term securitization. In other words, securitization enables a company to transform its receivables into securities negotiable on the financial market, enabling it to raise funds rapidly without increasing its debt ratio.

Today, BOAD is launching a large-scale securitization operation. Can you tell us more about it?

The issue amounts to 150 billion FCFA. This operation will partly finance the institution’s « Djoliba » plan. This plan identified 5 priority areas: Infrastructure, Agriculture and Food Security, Energy, Health and Education, Real Estate, whose main objectives can be summarized as follows:

  • Help create 245,000 jobs
  • Increase average drinking water production by 88,000 m3/day
  • Produce 170,000 tonnes of rice per year
  • Contribute some CFAF 3,700 billion to the GDP of the States
  • Install 13,000 km of roads
  • Contribute 380 MW of additional energy capacity
  • Avoid 18 million tCO2

Who are the investors interested in this type of operation, and what are the advantages for them?

First of all, investors interested in this type of transaction are generally institutional investors. They are looking for investments with stable, predictable returns, which perfectly match the characteristics of this operation.

Secondly, this operation offers one of the best risk/return ratios on the market for a number of reasons:

  • Preferred creditor status, which gives receivables a very high level of seniority;
  • The quality of the Sponsor, BOAD: the best and only Investment Grade rating in the UEMOA zone;
  • Geographic diversification in a single investment;
  • AAA, the best possible rating;
  • A net rate of 6.10% throughout the UEMOA zone;
  • A Junior tranche of 1% fully subscribed by BOAD, reinforcing the alignment of interests with investors
  • A minimum 5% reserve account;
  • The underlying: all sovereign debt with very low default risk;
  • A short duration of 2.8 years.

Hello Mr. Etse, SGI-TOGO is part of a Consortium of three SGIs selected for the operation. Could you tell us exactly what the Consortium's role is?


The consortium selected is responsible for placing the bonds issued by the fund on the regional financial market with investors (individuals and legal entities),

Similarly, the aforementioned consortium will rely on the members of the Syndicat de Placement (the other SGIs) to transmit subscriptions registered at their counters or the detailed list of subscribers to the Consortium for centralization.

Also, as part of the transaction’s unwinding, the Consortium should ensure that it has sufficient funds to cover the entire syndicate’s subscriptions.

Given your experience of market operations and the current climate, do you think investors will have the appetite to subscribe?

You know, first of all, BOAD is a benchmark issuer on our financial market, and all investors, with a view to diversification, always want to have BOAD securities in their portfolios. The securities are issued via a vehicle for the securitization of BOAD’s healthy claims on governments, and investors will have an appetite for this paper.

Also, as a reminder, and in view of its signature quality, BOAD’s previous issues have been successfully settled and closed on the Regional Financial Market.

With this attractive and competitive rate, the Consortium is committed to deploying all its material and human resources to ensure the success of this first BOAD issue via a receivables securitization mutual fund (FCTC) on the regional market for several years. We therefore call on individual and corporate investors to subscribe to these bonds, which combine security, diversification, liquidity and profitability, en masse and, above all, early enough to avoid the risk of early closure.