LONDON - Senegal's short-term commercial loans are on offer at steep ‍discounts, four finance industry sources ‍told Reuters, highlighting concerns about the indebted West African country's ability to meet financial obligations.

Senegal's euro-denominated loans ​maturing as early as February are being discussed in the market currently at or below 80 cents on the euro, the sources said.

As ⁠a result, the country is more reliant on commercial loans and domestic debt.

Two of the sources said it was unusual for loans ⁠with such short ‌maturities to be offered at such low prices. They said this reflected concerns about Senegal's ability to repay its loans - even the smaller-scale near-term maturities.

Senegal is facing a debt crunch after finding more ⁠than $11 billion in debt that was not reported by a previous administration, pushing its debt-to-GDP ratio above 119%. The International Monetary Fund suspended Senegal's $1.8 billion lending programme last year.

Analysts and investors have said it is increasingly likely the government will have to restructure the debt given its increasing financing needs and the absence of an IMF programme.

The country is in talks ⁠with the IMF on a new ​bailout loan, but this has taken longer than expected and Prime Minister Ousmane Sonko has said the Fund wanted the government to restructure some debts, which he ‍said would be "a disgrace."

Senegal's finance ministry, when asked about trading and pricing of Senegal loans, said none of the information was correct.

None of the sources said ​they planned to bid for the loans and Reuters could not establish if sellers were getting firm bids from other investors.

BOND PRICES UNDER PRESSURE

The loan prices also reflect a slide in the country's international bonds, which have hit record lows in the past few weeks.

The price of Senegal's government bonds has plummeted in recent weeks. The shorter-dated 2028 euro-denominated maturity is bid at roughly 70 cents on the euro, while dollar- and euro bonds maturing in 2031 and beyond are bid between 54 and 61 cents, Tradeweb data showed, well below the 70 cent threshold under which debt is seen as distressed.

Two of the sources said Standard Chartered had originated the loans, but they said it was not clear who currently holds the loans.

Standard Chartered declined to ⁠comment.

Standard Chartered is a key arranger of syndicated loans, export credit and structured ‌trade financing in Africa.

It has been active in Senegal for years, supporting the construction of an Olympic football stadium in Diamniado, which according to media reports cost around $279 million, and a bridge in the new Port of Ndayane project that started ‌in 2022.

According to ⁠public government documents, commercial debt payments of 1,017.56 billion XOF ($1.8 billion) are due next year to international creditors.

($1 = 566.0000 CFA francs)