African Development Bank Launches First Bond Issuance in Moroccan Dirhams
In a significant development for Morocco's financial landscape, the African Development Bank (AfDB) has successfully completed its first bond issuance denominated in Moroccan dirhams (MAD), amounting to an impressive one billion dirhams. This landmark transaction, structured as a private placement with qualified investors, features a seven-year maturity and a floating interest rate indexed to the Moroccan Overnight Index Average (MONIA). This inaugural issuance is not just a financial transaction; it represents a strategic initiative aimed at diversifying the Bank's financing offerings within Morocco.
By introducing the Moroccan dirham into its financing framework—alongside traditional currencies such as the euro and the US dollar—the AfDB is set to enhance its service delivery to a broader spectrum of clients. This move is particularly relevant as it addresses the growing demand for financing in local currency, thus allowing for more tailored solutions that better meet the unique needs of Moroccan enterprises and projects.
Strategic Development of Local Currency Financing
In addition to this bond issuance, the African Development Bank is exploring the possibility of establishing a dedicated treasury portfolio focused on the dirham. Such a portfolio could be notably funded through the conversion of a portion of the Bank's foreign currency liquidity. This strategic approach is designed to bolster the gradual development of local currency financing capabilities in Morocco, underscoring the Bank's commitment to fostering a robust financial ecosystem.
The development of local currency financing is a top priority for the AfDB, and its choice to launch this initiative in Morocco is underpinned by a strong, long-standing partnership with the Kingdom. Factors such as the size of the AfDB's operational portfolio in the country, the evident client demand for dirham financing, and the maturity of the Moroccan financial market have all played a role in this decision. Furthermore, the Bank intends to collaborate with the Moroccan government and local market participants to deepen the national financial market, particularly through the creation of hedging instruments and enhancing liquidity in the derivatives market. Insights gained from this bond issuance will also inform the Bank's future efforts to roll out similar initiatives involving other African currencies.
The successful completion of this inaugural transaction is attributed to the close collaboration between the African Development Bank, Moroccan authorities, and local financial market stakeholders. The Bank extends its gratitude to the Ministry of Economy, Finance and Public Performance, Bank Al-Maghrib, and the Moroccan Capital Markets Authority (AMMC) for their unwavering support and effective engagement throughout the operation. Special thanks are also due to Attijari Finances Corp., which served as the financial adviser, as well as to Attijariwafa Bank and CDG Capital, who acted as lead managers, for their essential contributions to the structuring and success of this issuance. Additionally, the Bank expresses appreciation to all investors and partners who played a role in making this transaction a success.
As reported by afdb.org.
