What the government said

The numbers that matter

After lengthy discussions with the IMF, Senegal reached a staff-level understanding last week on an extended-credit facility worth $2.2 billion, pending sign-off by the lender's board. The country's finances have been stretched since the revelation of billions of dollars in previously unreported loans, which drove overall debt to above 130% of GDP this year. The IMF expects obligations to stay high given large financing needs and unpaid bills at home.

Lo said domestic arrears come to 1.96 trillion CFA francs - about $3.5 billion - due to 5,425 creditors, covering both small and large businesses. Senegal also has $5 billion of international bonds outstanding.

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What creditors and analysts say

Officials intend to leave local currency debt out of the operation, a stance that could soothe nerves among some investors who had modeled losses as steep as 60% below par. Based in London, Stuart Culverhouse, Tellimer's chief economist, said a mild reprofiling could raise recoveries on Senegal's $5 billion in bonds to the "high 60s/low 70s" cents on the dollar. In a tougher deal with principal cuts and lower coupons, he sees recoveries slipping to the mid 40s or lower.

Where this leaves investors

If Senegal sticks to reprofiling and excludes local currency paper, bond math changes meaningfully from a full-fledged restructuring. The IMF facility is not finalized yet, and board approval in Washington will shape how the plan lands for holders of the country's debt - and for anyone watching sovereign risk spill over into real economies.

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