On the occasion of the launch of the second Social Bond of AFINHAB, formerly CRRH-UEMOA, Mrs. Astou DIOP SENE, General Manager of Finance Gestion et Intermédiation (FGI), discusses the challenges of this operation. This issuance of 40 billion FCFA marks a new step in the development of sustainable finance in the UEMOA. As the arranger of this issuance, alongside Société Générale Capital Securities West Africa, FGI provides its analysis of the market changes, the growing demands of investors, and the prospects opened by this new fundraising.
Mrs. DIOP SENE, why is this AFINHAB operation structurally important for the regional market?
This operation illustrates several major advances. Firstly, it is the second issuance of this kind for AFINHAB, confirming the strength of the model and the growth of sustainable finance in the region. Furthermore, with an issuance that raises the amount raised by this issuer’s program to 100 billion FCFA, an AAA rating assigned to the institution by Bloomfield and an SQS1 rating granted by Moody’s to its issuance program, AFINHAB establishes itself as a benchmark issuer in the regional market. Finally, and crucially, this operation demonstrates that the regional capital market has the capacity to absorb quality issuances, structured with rigor. This creates a demonstration effect; other institutions will see that it is possible to raise significant funds with good ratings.
How do you assess the evolution of the social bonds market in West Africa?
The market has matured significantly in recent years. We see a diversification of investors, an improvement in liquidity, a better understanding of financial instruments. But above all, we observe a qualitative change. Indeed, investors are no longer just looking for financial performance. They want to contribute to development. The AMF-UMOA taxonomy, published in March 2024, has created a reference framework that reassures investors and facilitates the structuring of operations.
What are the current expectations of institutional investors?
Expectations have evolved. Historically, investors were primarily seeking security and returns. Today, they demand three things: first, an unquestionable signature quality – hence the importance of AFINHAB’s AAA rating. Next, total transparency on the social impact. Finally, guaranteed liquidity – the dual listing planned on the BRVM and the Luxembourg Stock Exchange ensures this. These three elements make this operation a perfect response to current expectations.
What is the actual depth of the regional capital market?
The market has the necessary depth to absorb quality operations. FGI, since its launch in 2019, has mobilized an average of one hundred billion FCFA per year in placements. This demonstrates the market’s ability to raise significant funds. However, this depth depends on the quality of the operations. Regional and international investors are attentive to the strength of the issuers and the clarity of the funded projects. AFINHAB, with its rating, demonstrated social impact, and rigorous governance, attracts both regional and international investors.
What role do arrangers play in structuring such an operation?
Our role takes on several facets. Firstly, we work with AFINHAB to optimize the structure: amount, rate, duration, security mechanisms. Next, we ensure regulatory compliance with the AMF-UMOA. Then, we mobilize our network of investors. Finally, we contribute to highlighting the quality of AFINHAB’s signature to investors. This is a work that reflects the mutual trust between AFINHAB and its arrangers.
How does affordable housing fit into current investment priorities?
The housing deficit in the UEMOA is structural and worsens with demographic growth. Investors understand that financing affordable housing is investing in social stability. This operation directly contributes to the United Nations Sustainable Development Goals (SDGs 1, 10, and 11). This is a powerful argument for responsible investors.
What perspectives do you see for the regional market after this operation?
This operation creates a major demonstration effect. This will pave the way for other quality issuances and contribute to the development of the regional market. We also see a gradual convergence between African standards and international standards. The regional capital market is shifting towards a new phase of maturity and attractiveness.
