Morocco News

UPDATE 1-Morocco raises $3 billion with three-part bonds

(Adds finance ministry details and background)

DUBAI, Dec 9 (Reuters) - Morocco has raised $3 billion in a triple-tranche bond sale, it said on Wednesday, as it seeks to bolster state finances hit by the coronavirus pandemic.

The government sold bonds with maturities of seven, 12 and 30 years, raising $750 million, $1 billion and $1.25 billion from each tranche respectively, according to a document issued by one of the banks leading the deal and reviewed by Reuters.

The debt sale, which offers coupons of 2.375%, 3% and 4%, was managed by Barclays, BNP Paribas, JPMorgan and Natixis.

Demand for the bond exceeded $13 billion, Morocco’s finance ministry said in a statement, confirming earlier Reuters reporting on the $3 billion sale.

This is the first dollar-denominated bond for Morocco in seven years and the second this year after a sale in October of a dual-tranche bond worth 1 billion euros. It also comes after Fitch in October cut the country’s credit rating to BB+ from BBB-.

The pandemic has hit both Moroccan exports and demand, with the economy expected to contract as much as 7% this year, according to the International Monetary Fund.

The government deficit this year will widen to 7.8% of gross domestic product from 4.1% last year, the Fund has said.

Morocco’s bonds come after a flurry of issuance by governments in the Middle East, who have tapped foreign investors by record levels this year to contain widening and attract yield-chasing investors amid low global rates.

Morocco’s government debt is set to surge to 76.1% of GDP in 2020 from 65% in 2019, the central bank has said.

Last week, the World Bank approved a $400 million loan in support of Morocco’s reforms to strengthen the safety net for poorer households.

Reporting by Davide Barbuscia; additional reporting by Ahmed Eljechtimi; editing by Kim Coghill, Larry King