Morocco reopens long-term USD-bonds, sets price guidance

By bne IntelliNews May 23, 2013

Morocco has re-launched its USD-denominated 2022 and 2042 conventional bonds, likely seeking to finance its budget needs and benefit from lower borrowing costs on the international debt market, Reuters reported. Morocco reportedly set an initial price guidance of 220bps over US Treasuries (roughly 4.125%) for a tap of its 4.25% USD 1bn December 2022 note. Another price guidance of 237.5bps over US Treasuries (around 5.5%) for a tap of its 5.5% USD 500m December 2042 note. The fundraising will reportedly be launched and priced on May 23. Barclays, BNP Paribas, Citi and Natixis are jointly arranging the 144A/Reg S transaction.

In February, Moody’s downgraded Morocco’s outlook to negative from stable but kept its sovereign ratings unchanged at Ba1 due to worsening fiscal and external positions given rising subsidy bill and widening public debt ratio to GDP.

Morocco's government will decide in June 2013 or July whether to sell a sovereign conventional bond or a sukuk to help bridge the budget deficit, finance minister Nizar Baraka has recently said. In 2013, the budget deficit will likely narrow to 5.5% of GDP from 6.7% the year before, the central bank forecast. 

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