The remarkable exit of Morocco on the international financial market (MFI) allows to ease the pressure on domestic liquidity, even to leave more room for the financing of the recovery of the economy, indicated, this Thursday in Rabat, Fouzia Zaâboul. , Director of the Treasury and External Finances in the Ministry of the Economy, Finance and Administrative Reform.
“Issued on December 8, 2020 on the MFI, the bond loan for a total amount of 3 billion dollars (MM $) will on the one hand ease the pressure on domestic liquidity, but also to constitute a pre-financing of the treasury ”, Zaâboul said.
She noted in this regard that the 27 billion dirhams (MMDH), mobilized within the framework of this loan, constitute “a pre-financing of the treasury”, noting that in 2021 the gross needs of the treasury are estimated at more than 120 billion dirhams.
“The need for financing has greatly increased due to the impact of the health crisis and the implementation of the recovery plan for the post-Covid-19 economy,” she observed, adding that this the need for financing could put great pressure on liquidity.
Likewise, she underlined that this recourse to the international financial market took place at a time when conditions on the dollar market have relaxed a lot in recent months, “particularly during the month of November and the beginning of December” .
As a result, many countries, especially emerging countries, issued in the dollar market, she added, noting that “as the international financial market is a market of opportunities, we could not miss this opening ”.
Returning to the success of this operation on the dollar market, Zaâboul highlighted Morocco’s many strengths, in particular “the political stability enjoyed by the country, under the leadership of King Mohammed VI, in a context marked by the various projects of reforms initiated, the anti-Covid vaccination project, as well as the scope of the recovery plan planned by our country ”.
With a total of 3 billion dollars, this bond loan, which constitutes the largest currency raising in the history of Morocco, concerned three tranches, the first concerns 750 million dollars over 7 years with a coupon of 2.375 %, a 2nd tranche of $ 1 billion over 12 years with a coupon of 3% and a third tranche of $ 1.25 billion over 30 years with a coupon of 4%.
Everything you need to know about exit from Morocco on the MFI
After a 7-year absence in the dollar compartment, Morocco successfully issued, on December 8, 2020, a bond issue on the international financial market (MFI) for a total amount of 3 billion dollars ($ billion).
This issue, which was oversubscribed more than 4 times, was a resounding success with international investors, of whom 478 were served, while the order book exceeded $ 13 billion.
It allows on the one hand to ease the pressure on domestic liquidity, but also to constitute a pre-financing of the Treasury, at a time when the gross needs of the Treasury are estimated at more than 120 billion dirhams in 2021.
This operation was carried out in the 144A / RegS format in order to allow a large participation of investors around the world and involved 3 tranches.
The 1st tranche of a 7-year maturity, for an amount of $ 750 million ($ M), was issued at a spread of 175 basis points (bps) and a price of 99.763%, thus offering a rate of yield of 2.412% and serving a coupon of 2.375%.
With a maturity of 12 years, the 2nd tranche, which concerns an amount of $ 1 billion, was issued at a spread of 200 bps and a price of 99.570%, i.e. a rate of return of 3.043% and a coupon of 3%, while the 3rd tranche, with a maturity of 30 years and a sum of $ 1.25 billion, was issued at a spread of 261 bps with a price of 100%, allowing a rate of return of 4% and a coupon of 4%.
The recourse to the international financial market took place in a context in which the conditions on the dollar market have relaxed a lot in recent months, and has made it possible to renew contact with American investors, diversify sources of financing and establish new new references on the Moroccan credit curve.
The Kingdom benefited from favorable conditions compared to the currency of issue. The risk premium is lower than that of the last outing in September, during which the Treasury raised one billion euros via the Eurobond, at an average rate of 1.66%.
The average spread for this latest release is around 240 bps, which is lower than the average risk premium demanded by investors with regard to emerging countries, which is currently over 330 bps.
Placed with high-quality investors, in particular fund managers, insurance companies and pension funds, the operation received a favorable reception, reflected in particular by a wide geographical distribution, in particular the United States, the United Kingdom, ‘Europe, Asia and the Middle East.
The said program follows a NetRoadshow led by the Minister of the Economy, Finance and Administration Reform, Mohamed Benchaâboun, and the teams of the Treasury and External Finance Directorate (DTFE) with the community of international investors.
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