Regulatory Alerts2020-04-22
Notice N° 006-04-2020 on the Issuance of 'COVID-19 Bonds' by Member States and their Refinancing via a Special BCEAO Window
The Central Bank of West African States (BCEAO) issued Notice N° 006-04-2020 to authorize member states to issue three-month Treasury bonds, designated “Covid-19 Bonds,” for immediate pandemic-related expenditures. The regulation establishes a special three-month refinancing window at a fixed 2.50% rate, permitting banks to obtain liquidity and allowing states to refinance these bonds from issuance up to one month post-acquisition. This framework enables member states to mobilize low-cost capital to resolve health crisis-induced financial pressures while streamlining regional market operations.
In the context of implementing measures taken by the BCEAO to counter the negative impacts of the Covid-19 pandemic, the Central Bank has decided to support member states in issuing Treasury bonds, named “Covid-19 Bonds”.
These bonds, with a maturity of three months, will be issued on the regional financial market and serve to meet immediate expenses related to fighting the Covid-19 pandemic. The BCEAO, with the assistance of UMOA-Titres Agency, will carry out the structuring and scheduling of these issuances.
A special three-month refinancing window has been opened by the BCEAO to enable banks to refinance these bonds. Indeed, on this special window, banks can obtain liquidity from the Central Bank for a maturity of three months, at a fixed rate of 2.50%.
The Covid-19 Bonds may be submitted for refinancing on the special window from the day of issuance and at the latest one month after their acquisition for the remaining term of the bond.
Through this decision, the Central Bank intends to support states in mobilizing low-cost financial resources to resolve difficulties induced by the health crisis related to Covid-19.
Done in Dakar, on April 21, 2020 THE CENTRAL BANK OF WEST AFRICAN STATES Abdoulaye Fadiga Avenue P.O. Box 3108 – Dakar - Senegal Tel. (221) 33 839 05 00 / Fax. (221) 33 823 93 95 www.bceao.int NOTICE N° 006-04-2020 REGARDING THE ISSUANCE OF TREASURY BONDS, NAMED “COVID-19 BONDS” BY MEMBER STATES AND THEIR REFINANCING ON A SPECIAL THREE-MONTH WINDOW OF THE BCEAO