Senegal bondholders hire White & Case as $5B restructuring looms

Holders of Senegal's sovereign bonds have organized a creditor group and hired White & Case as legal counsel, Reuters reported on Wednesday, citing four sources with direct knowledge of the matter. The group includes at least eight fund managers, the sources said, declining to name the firms.reuters

The move comes as the West African nation prepares to restructure nearly $5 billion in Eurobonds under an enhanced version of the G20 Common Framework, a process that could set a precedent for how Africa handles sovereign debt crises.

A Fiscal Crisis Years in the Making

Senegal's debt troubles trace back to the 2024 discovery of more than $11 billion in previously undisclosed government liabilities accumulated under former President Macky Sall's administration. The revelation pushed total public-sector debt to about 132% of GDP and forced the IMF to suspend an earlier $1.8 billion financing program.africannow+1

President Bassirou Diomaye Faye, who took office in April 2024, has since made fiscal transparency central to his economic agenda. The government cut its budget deficit from 13.4% of GDP in 2024 to 6.4% in 2025. On September 1, the IMF and Senegalese authorities announced a staff-level agreement on a new three-year, $2.2 billion program under the Extended Credit Facility, though the deal still requires approval from the Fund's executive board.reuters+2

S&P Global Ratings ↗ 1.26% added pressure on September 4 by cutting Senegal's long-term foreign-currency sovereign rating to "CC" from "CCC+," its lowest level in nearly 26 years. The agency said a distressed exchange or default on Senegal's foreign-currency commercial debt was "extremely likely".reuters+2

Testing a Revamped Framework

Senegal's restructuring will be the first major test of reforms to the G20 Common Framework after prolonged and difficult processes in Zambia, Ghana, and Ethiopia. The government plans to convene a joint information meeting with multilateral, bilateral, and private creditors, with the IMF hosting, aiming to reduce the information gaps that complicated earlier cases.businessday

White & Case has advised governments including Ethiopia and Ukraine in past debt restructurings, and creditor groups in Lebanon and Sri Lanka. Informal bondholder discussions had been underway since at least July, when Bloomberg reported that firms including Morgan Stanley ↗ 1.38% Investment Management and BlueBay Asset Management had begun early talks about forming a group.bloomberg+1

Obstacles Ahead

Senegal has said CFA-franc-denominated debt will be excluded from the restructuring, leaving international bondholders likely to bear a greater share of any adjustment. The government also faces questions about its use of Total-Return Swaps with institutions including First Abu Dhabi Bank and Africa Finance Corporation, instruments the IMF has flagged as potentially complicating negotiations.africabusinessinsight+1

A Eurobond payment is due on September 13, and Senegal has so far signaled it intends to continue servicing its debt during negotiations — a distinction from Zambia, Ghana, and Ethiopia, which stopped some payments while restructuring. Whether Dakar can maintain that stance while securing enough relief to restore sustainability remains the central tension facing creditors and policymakers alike.businessday