Le Sénégal n’est plus l’émetteur le plus risqué d’Afrique : La raison principale (Finances)
Senegal is no longer the most troubled issuer in Africa. A dubious distinction, which it now cedes to Mozambique, which is facing even more severe budgetary problems.
Indeed, according to Bloomberg, the sharp rise in Mozambique's sovereign yield premiums relative to Treasury bonds has propelled it ahead of Senegal. It is currently the most troubled sovereign issuer in Africa.
The country's already fragile public finances have been further strained by the effects of the war in Iran. The country's yield spread—that is, the additional premium demanded by investors to hold its debt in hard currency compared to Treasury bonds—has skyrocketed.
Mozambique 1473, Senegal 1423
It reached 1473 basis points on Friday, according to Bloomberg, which relies on the JP Morgan Chase & Co index. A level well above the 1000 basis point mark which indicates a distressed situation.
For Senegal, the yield gap stands at 1423 points. This puts it below that of Mozambique for the first time since November.
Generally, the greater the yield gap, the greater the perceived risk. For example, when comparing two bonds, the one with the higher yield is usually considered riskier than the one with the lower yield. A less than honorable position, which it now cedes to Mozambique, grappling with even more severe budgetary problems.
Indeed, according to Bloomberg, the sharp rise in Mozambique's sovereign yield premiums relative to Treasury bonds has propelled it ahead of Senegal. It is currently the most troubled sovereign issuer in Africa.
The country's already fragile public finances have been further strained by the effects of the war in Iran. The country's yield spread—that is, the additional premium demanded by investors to hold its debt in hard currency compared to Treasury bonds—has skyrocketed.
Mozambique 1473, Senegal 1423
It reached 1473 basis points on Friday, according to Bloomberg, which relies on the JP Morgan Chase & Co index. A level well above the 1000 basis point mark which indicates a distressed situation.
For Senegal, the yield gap stands at 1423 points. This puts it below that of Mozambique for the first time since November.
Generally, the greater the yield gap, the greater the perceived risk. For example, when comparing two bonds, the one with the higher yield is usually considered riskier than the one with the lower yield.
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