Circular No. 004-2005 on the Procedure for Issuing State Bonds on the UMOA Regional Financial Market

Regional Council for Public Savings and Financial Markets (CREPMF) West African Monetary Union

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CIRCULAR No. 004-2005

ON THE PROCEDURE FOR ISSUING STATE BONDS ON THE UMOA REGIONAL FINANCIAL MARKET

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The General Secretariat of the Regional Council for Public Savings and Financial Markets (CREPMF) wishes to inform accredited market participants and issuers on the UMOA regional financial market that, in accordance with current regulations, bond issuance by member States of the Union on the regional financial market must follow the procedure described below.

I- CONDITIONS FOR THE ISSUANCE OF STATE BONDS

According to the provisions of paragraph 1 of Article 19 of the Annex to the Convention establishing the CREPMF, any public offering operation must be authorized by the Regional Council through the granting of a visa.

However, Article 136 of the General Regulations on the organization, operation, and control of the UMOA regional financial market provides that « during the issuance of public debt securities, or guaranteed by a State or a group of States, the governments of the States or public authorities draw up an information note which is transmitted to the Regional Council before the issuance date of the securities. The information note is exempt from prior visa before its distribution to the public… ».

Circular No. 1/97 on public offerings mandates, in its Article 3, that States submit to the Regional Council by stipulating that « States, public authorities… are required to address themselves to the Regional Council for the necessary steps to be taken in order to carry out their operations ». It confirms, in its Article 16, the visa exemption by providing that « the prior visa procedure with the Regional Council is not required for bonds issued or guaranteed by a State or a group of States of the Union ».

Thus, since States are exempt from the visa, they pay no commission to CREPMF when carrying out public offering bond operations.

01 B.P. 1878 Abidjan 01/Côte d’Ivoire - Avenue Joseph ANOMA TEL.: (225) 20215742/20215768/20315620 Fax: 20332304 / 1

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II- PROCEDURE FOR THE ISSUANCE OF STATE BONDS

1- Authorization of the operation by the competent State authorities, 2- Submission to CREPMF for necessary steps to be taken, 3- Response from CREPMF, 4- Selection of one or more Management and Intermediation Companies (by competitive bidding or negotiated procedure) for the execution of the operation: 4-1 a Management and Intermediation Company (MIC) may be responsible for structuring or arranging the operation, as the issuer may do itself, 4-2 pursuant to Article 4 of Circular No. 1/97 on the organization of public offerings on the regional financial market, a MIC must necessarily handle the placement execution. It will centralize subscriptions and proceed to pay the issuer. It may, for this purpose, form a placement syndicate. 5- Drafting of the information note by the MIC and/or the State. This information note must necessarily contain the following information: a. the name of the State responsible for the issuance, b. the description of the offered securities, c. the nominal value and issue price of the bond, d. the use of proceeds, e. the placement terms for the securities, f. the remuneration terms of the bond, g. the repayment terms of the bond. However, Article 16 of Circular No. 1/97 exempts States from providing certain information if it is « of a nature to jeopardize national defense, foreign policy, public order, or the fundamental interests of one of the UMOA member States ». 6- Transmission of the draft information note to CREPMF, 7- Observations from CREPMF on the draft information note, 8- Transmission of the revised information note to CREPMF accompanied by advertising documents, 9- Assignment of an identification number to the operation, 10- Launch of the operation (distribution of the information note to the public), 11- Subscriptions, 12- Closure of the operation,

01 B.P. 1878 Abidjan 01/Côte d’Ivoire - Avenue Joseph ANOMA TEL.: (225) 20215742/20215768/20315620 Fax: 20332304 / 2

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13- Filing of the information note with CREPMF before the securities issuance date (value date) 14- Transmission of the operation report to CREPMF after the issuance of securities. This report must specify: a. the main characteristics of the operation (name and amount of the bond, nominal value and issue price of the security, interest rate, taxation, amortization method, lead MIC, placement syndicate, etc.), b. the subscription period, c. the value date, d. the bond amortization schedule, e. the summary statement of subscriptions, by placement agent, by country of origin of subscribers, by category of subscribers (individuals, institutional investors, UCITS, etc.). 15- Registration of the operation by CREPMF.

Done in Abidjan, on August 1, 2005

The General Secretary

[Signature]

Edoh Kossi AMENOUNVE

01 B.P. 1878 Abidjan 01/Côte d’Ivoire - Avenue Joseph ANOMA TEL.: (225) 20215742/20215768/20315620 Fax: 20332304 / 3