Instruction No. 02/CRCT/2021 - Operating Procedure for the Issuance of Treasury Securities by CEMAC Member States via Domestic Syndication

BANQUE DES ETATS DE L'AFRIQUE CENTRALE SERVICES CENTRAUX Cellule de Règlement et de Conservation des Titres INSTRUCTION N° 02/CRCT/2021 IMPORTANT MODE OPÉRATOIRE POUR L'EMISSION DES VALEURS DU TRÉSOR DES ÉTATS MEMBRES DE LA CEMAC PAR LA PROCEDURE DE SYNDICATION DOMESTIQUE

The GOVERNOR, Having regard to Regulation No. 03/19/CEMAC/UMAC/CM on treasury securities issued by CEMAC Member States; Having regard to the General Regulations of the Settlement and Securities Conservation Cell (CRCT); Having regard to the CRCT Accession Agreement; Having regard to the Convention on the organization of treasury securities issuances; Having regard to the Convention on participation in treasury securities issuances; Having regard to the Specifications for Treasury Securities Specialists (SVT); After approval by the CRCT Supervisory Council during its ordinary session on September 30, 2021, via videoconference; Pursuant to Article 34, paragraph 1 of the aforementioned Regulation No. 03/19; HAS ADOPTED THE FOLLOWING INSTRUCTION:

Article 1. - DEFINITION OF DOMESTIC SYNDICATION Domestic syndication is an issuance procedure through which the Public Treasury issues treasury securities via a selected group among the Treasury Securities Specialists (SVT) members of its network. The first domestic syndication issuance may subsequently be supplemented by one or more auctions.

Article 2. - ROLE OF THE BEAC The BEAC is responsible for monitoring compliance with provisions related to the issuance of treasury securities via domestic syndication. It also ensures the settlement of issuance and redemption operations for treasury securities. At the request of the Public Treasury, the BEAC may assist in preparing a treasury securities issuance via domestic syndication.

Article 3. - SELECTION OF THE LEAD MANAGER AND PLACEMENT SYNDICATE The Public Treasury selects the lead manager and members of the placement syndicate from among its network's SVT, based on a specification sheet and selection criteria established by the Treasury. At the request of the concerned Public Treasury, the BEAC may provide its opinion on an SVT's capacity to serve as lead manager.

Article 4. - NEGOTIATION OF ISSUANCE CONDITIONS The Public Treasury negotiates the issuance conditions with the lead manager, including the operation's structure, the proposed issuance amount, the interest rate, the issue price of Treasury Obligations Assimilable (OTA), the communication strategy, and the commission fees for the lead manager and placement syndicate members.

Article 5. - REFERRAL TO THE BEAC The Public Treasury refers to the BEAC for the realization of a treasury securities issuance. The request is accompanied by the following information:

• The Information Note;
• The Operation Note;
• The mandate granted to the lead manager and placement syndicate members.

Article 6. - CONTENT OF THE INFORMATION NOTE The information note must contain at minimum the following key information:

• The Public Treasury issuer's certificate;
• National economic situation and outlook;
• Foreign trade and balance of payments situation and outlook;
• Recent public finance situation and outlook;
• Public debt situation including key elements of the ongoing medium-term debt strategy;
• The year's financing plan;
• The execution status of the mobilization of resources for the current year;
• The most recent rating, if applicable;
• Risk factors and potential preventive measures: . Political and security risks; . Social risks; . Budgetary risks; . Other risks likely to affect the State's capacity to service public debt. The Information Note is produced once per year and may cover all issuances planned by the concerned Public Treasury during that year. However, a new information note must be produced by the Public Treasury as soon as new macro-budgetary data or a new rating becomes available.

Article 7. - CONTENT OF THE OPERATION NOTE

• The object of the issuance;
• The denomination of the treasury securities subject to issuance;
• The maturity date and type of interest rate for each treasury security;
• Indicatively, the interest rate and amount requested per treasury security;
• The submission presentation method;
• The allocation of submissions method;
• Any applicable call option clause.

Article 8. - VERIFICATION OF CONFORMITY OF THE ISSUANCE APPLICATION FILE The BEAC's national department acknowledges receipt of the file, verifies its completeness, and issues a conformity opinion to be sent to the Public Treasury within three working days from the date of referral. The contents of the Information Note and Operation Note fall under the responsibility of the issuing Public Treasury. The Operation Note contains at minimum the following information:

• The issuer's Public Treasury name;
• The total amount of submissions for each treasury security;
• The amount retained per treasury security;
• The issue price of each treasury security;
• The interest rate of each treasury security;
• The maturity date of each treasury security;
• The issuance (allocation) date;
• The settlement date;
• The security code for each treasury security;
• Allocation by investor category;
• Allocation by country of residence. The Operation Note is produced for each treasury securities issuance.

Article 9. - RESERVATION OF SECURITY CODE The Public Treasury attaches the BEAC's conformity opinion to the Operation Note to reserve a security code at the central depository for each treasury security indicated in said Operation Note. The security code reservation request must be made no later than two working days following receipt of the conformity opinion.

Article 10. - CONDITIONS FOR PARTICIPATION IN TREASURY SECURITIES ISSUANCE Legal or natural persons, regardless of their place of residence, may subscribe to treasury securities through the lead manager or members of the placement syndicate retained by the issuing Public Treasury.

Article 11. - OPENING OF THE SUBSCRIPTION PERIOD The subscription period begins no later than ten working days from the date of obtaining the BEAC's conformity opinion. After this deadline, the Public Treasury must request a new conformity opinion. Before the opening of the subscription period, the Public Treasury or its agent (lead manager) communicates to the BEAC the order book opening date, interest rate, issue price for OTAs, and amount requested per treasury security. The BEAC confirms receipt of the information. Upon opening of the subscription period, the issuing Public Treasury specifies the interest rate, issue price for OTAs, amount requested, and security code per treasury security.

Article 12. - DURATION OF THE SUBSCRIPTION PERIOD The subscription period may not exceed three working days. In exceptional circumstances and after BEAC authorization, the subscription period may be extended for an additional two working days.

Article 13. - CLOSING OF THE SUBSCRIPTION PERIOD AND ALLOCATION OF SUBMISSIONS In consultation with the Public Treasury and within the BEAC-approved timeframe, the lead manager closes the order book and proceeds to allocate received submissions. Submissions are allocated according to allocation rules defined in the Operation Note. The total amount of retained submissions must remain within the announced issuance amount by the Public Treasury.

Article 14. - OPERATION REPORT The lead manager prepares an operation report including the following information:

• The issuer's Public Treasury name;
• The total amount of submissions for each treasury security;
• The amount retained per treasury security;
• The issue price of each treasury security;
• The interest rate of each treasury security;
• The maturity date of each treasury security;
• The issuance (allocation) date;
• The settlement date;
• The security code for each treasury security;
• Allocation by investor category;
• Allocation by country of residence. The report is prepared on the day of offer allocation and sent to the BEAC on the same day. The Public Treasury sends the same day to the BEAC the subscription amounts transmitted through each placement syndicate member.

Article 15. - PUBLICATION OF RESULTS The Public Treasury transmits, the same day after offer allocation, to the BEAC for publication on its website and dissemination through other communication means, the operation report.

Article 16. - TRANSMISSION OF INFORMATION FOR DELIVERY OF TREASURY SECURITIES No later than the day following offer allocation, the Public Treasury sends to the central depository the securities and the distribution by subscriber for the delivery of treasury securities. The lead manager informs each investor of the amount of their submission retained by the Public Treasury and recalls the settlement date for retained subscriptions.

Article 17. - CREATION OF THE OPERATION IN THE DEDICATED PLATFORM No later than the day following receipt of the operation report, the BEAC creates in the dedicated platform the auction and registers the results of each treasury securities issuance covered by the operation.

Article 18. - SETTLEMENT OF RETAINED SUBSCRIPTIONS The cash settlement of retained subscriptions takes place two working days following the offer allocation date indicated in the report sent to the BEAC and central depository. The delivery of securities by the central depository is effected against payment by each syndicate member of the amount corresponding to the securities subscribed through them. Subscriptions are paid in a single installment by debiting each syndicate member's current account at the BEAC and crediting the issuing Public Treasury's settlement account. Each placement syndicate member takes necessary measures to guarantee the settlement of treasury securities allocated to them for their own account or client accounts. In case of payment default on the settlement date, the amount of unsettled subscriptions is subject to penalties at a rate fixed per day of delay, equal to the prevailing penalty rate, without prejudice to other sanctions provided by current regulations. The corresponding amount is paid into the issuing Public Treasury's settlement account at the BEAC. To this end, the SVT syndicate member authorizes the BEAC to automatically debit its settlement account to pay for the subscribed securities as well as related fees and penalties.

Article 19. - REPAYMENT OF MATURITY TREASURY SECURITIES AND PAYMENT OF INTERESTS The repayment of matured treasury securities and the payment of accrued interest are initiated, in the name and on behalf of the concerned Public Treasury, by the BEAC.

Article 20. - PAYMENT AMOUNT The payment of interest amounts and the repayment of principal at maturity are automatically executed in the dedicated platform by automatic debit of the concerned Public Treasury's current account and credit to each syndicate member's account. The BEAC effects this automatic debit of the Treasury's settlement account when sufficient funds are available. In case of insufficient funds, treasury security holders receive payment within the limit of available funds and pro rata to the number of treasury securities held. The remainder is repaid as funds are accumulated. The amount of unsettled operations on the settlement date is subject to penalties at a rate fixed per day of delay, equal to the prevailing penalty rate. The corresponding amount is paid into each SVT's settlement account at the BEAC, pro rata to the number of treasury securities subscribed.

Article 21. - ENTRY INTO FORCE This Instruction enters into force on the date of its signature.

Done in Yaoundé, on September 30, 2021 The Governor, ABBAS T. TOUOLI