AfDB issues one billion dirhams in Morocco
By the AFREEQUE newsroom, based on Aujourd’hui le Maroc and LesEco.ma
The African Development Bank has carried out its first bond issue in Moroccan dirhams, worth one billion dirhams and with a seven-year maturity. Placed with qualified investors, the operation is intended to diversify the AfDB’s local-currency funding and serve as a pilot for other African currencies, according to Aujourd’hui le Maroc and LesEco.ma.
The African Development Bank (AfDB) carried out its first bond issue denominated in Moroccan dirhams, for one billion dirhams. The operation took place on Friday as a private placement with qualified investors, according to an AfDB statement relayed by Aujourd’hui le Maroc and LesEco.ma.
The bond has a seven-year maturity and its variable interest rate is indexed to the Moroccan Overnight Index Average (MONIA), a benchmark rate for Morocco’s money market. The issue complements the AfDB’s main funding currencies, notably the euro and the dollar, and is intended to enable it to offer local-currency solutions to a wider range of clients, according to LesEco.ma.
The bank also plans to create a treasury portfolio dedicated to the dirham, notably by converting some of its liquidity held in foreign currencies. Morocco was chosen for this pilot initiative, according to LesEco.ma, because of the long-standing partnership between the Kingdom and the AfDB, the size of the bank’s operations portfolio in the country, demand for dirham financing and the maturity of Morocco’s financial ecosystem.
The AfDB wants to work with Moroccan authorities and local financial stakeholders to develop hedging instruments and improve liquidity in the derivatives market. The operation follows the bank’s provision of 487 million dollars to Morocco for its reforms, announced on 22 October. Lessons from the Moroccan experience should also guide the gradual rollout of similar financing in other African currencies, according to Aujourd’hui le Maroc and LesEco.ma.
