JPMorgan, Barclays, BNB… Moroccan debt continues to attract major investors

JPMorgan, Barclays, BNB… Moroccan debt continues to attract major investors

Another successful bond raise for the Kingdom, which ended the issuance in this first quarter of 2023 (closing announced on 1any March), over $1.25 billion in bond claims on the 5-year term, and a similar amount on the 10-year term.

The enthusiasm of international investors caused spreads to drop to 260 bps (initially announced at 300 bps) at the 10-year maturity, a drop of 40 bps, and 195 bps at the 5-year maturity (initially announced at 235 bps). ), a similar decrease of 40 basis points. It should be noted that the Moroccan spread is calculated in relation to the American curves, and in Europe the reference is the German curve.

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The raise, led by Treasury management, is the first since the fourth quarter of 2020 when the kingdom, which is currently rated BB+ by Standard and Poor’s and Ba1 by Moody’s, made two raises:

  • The first in September 2020, with a nominal value equivalent to one billion euros, with two maturities: 5 and a half years and 10 years.
  • The second with a face value of $3 billion, divided into three maturities: $1.35 billion for a period of 30 years, at a rate of 4%, $1 billion for a term of 12 years, at a rate of 3%, and $750 million. The US dollar has a maturity of 7 years, at a rate of 2.375%.

The kingdom whose delegation visited the main global financial capitals (London, New York, Frankfurt and Paris) was accompanied in this financial operation by prestigious international banks, in this case two American banks GB Morgan, Citigroup, Deutsche Bank and Deutsche Bank. French bank BNP Paribas. In 2020, Morocco is backed by BNP Paribas, Barclays, and JP Morgan.

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These successful bond issues, which are priced in dollars, in London, demonstrate the strength of the kingdom’s economy and the continued attraction of international investors to Moroccan debt. This good news for Morocco is coupled with positive growth forecasts announced by the World Bank. l’institution table sur a taux de croissance de 3,1% in 2023 versus 1,2% in 2022. The economy of Royaume semble donc rebondir et résister à des perturbations majeures à l’image de l’inflation galopante ou encore de drought.

Therefore, Moroccan growth is developing in a cogwheel after the coincidence of the crises that the Kingdom suffered from in light of a global climate of economic, environmental and political tensions. Since 2020, the Moroccan economy, like anywhere in the world, has been in recession and this is due to the pandemic. The variance in recorded GDP was -7.2%. In 2021, economic recovery was recorded especially with the success of the vaccination campaign, at that time, Morocco registered a growth rate of 7.9%. The year 2022 marks a slowdown in the national economy, with growth barely reaching 1.2%.

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The World Bank also considers the debt to be under control, despite the many reforms underway, particularly those related to social protection. According to the institution, the budget deficit at the end of 2023 should be around 4.6% of GDP, compared to 5.1% at the end of 2022.

Sharaf Lohamadi is a consultant, columnist, and book author. Charaf Lohamadi is a financial engineer, author of Fragments of the History of Financial Crises, and speaker at the Léonard de Vinci Pole as well as at IMT Atlantique. He publishes economic and financial records for the Spanish and Portuguese press in the “RaniaPro Europe Magazine”.

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