Yellow taxi cabs drive down a road in Senegal’s capital city of Dakar on Sept. 6, 2023.
John Wessels | Afp | Getty Images

LONDON, May 26 (Reuters) – Investors are now pricing Senegal will need a 15% writedown of its debt and push back its payments by at least five years as part of an effort to mend its finances, analysts at JPMorgan warned on Tuesday as fresh turmoil engulfed the country.

Senegal’s government bonds tumbled on Tuesday after the country’s president appointed a new technocrat prime minister days after dismissing Ousmane Sonko, the firebrand former PM long viewed as the main opponent to a debt restructuring.

JPMorgan’s analysts said the developments had increased the likelihood of “a more adverse scenario”.

Based on certain assumptions, they said “current market pricing on Senegal 33s (bonds due to be paid back by 2033) implies a 5 year maturity extension, a coupon rate reduction to 3/4ths of the current level and a 15% nominal haircut.”