Morocco pulls off US$1.5bn launch

Morocco pulls off US$1.5bn launch

Published: December 3, 2012

The deal is a dual tranche of 10- and 30-year bonds. The 2022 offering was ten times oversubscribed.

Morocco has successfully launched US$1.5bn worth of debt in a dual tranche. The first consisted of 10-year bonds with a coupon of 4.25%. It was priced at a spread of 275 basis points over US Treasury levels, below the initial guidance of 300. The launch was 10-times oversubscribed.

The second tranche, almost certainly motivated by the success of the first, was for US$500mn in the form of 30-year bonds. These bonds pay a coupon of 5.5% and were issued at a spread of 290 basis points. 

Fitch has assigned the bond issue a ‘BBB-(EXP)’ rating. This is in line with the country’s long-term foreign currency Issuer Default Rating of ‘BBB-’, with a stable outlook, which was reaffirmed on 7 November. 

Morocco's public finances have been badly affected by the economic crisis in Europe, by far the country's biggest export market. But a precautionary line deal with the IMF and positive comments by the government on pension and subsidy reform will have given investors confidence.