Washington, D.C., February 4, 2005.
– The International Finance Corporation (IFC), the private sector
arm of the World Bank Group, launched its dirham denominated bonds in the
domestic Moroccan capital market. The MAD 1.0 billion (approximately
$117 million equivalent) bonds were targeted at domestic institutional
investors. The proceeds of the bond offering will be used for general
operations of IFC.
This transaction will further develop the Moroccan capital markets and
will provide a benchmark for future high-grade issuers. This transaction
is the first bond offering by an international institution in MAD, and
represents the first domestic bond offering by a supranational in Africa
and the Middle East.
The transaction has been listed on the Casablanca Stock Exchange (CSE)
and was distributed using a Dutch auction system. The 7 year bonds
carry a coupon of 4.54% and were distributed to more than 20 investors,
including insurance companies, mutual funds, and pension funds. The lead
manager is Banque Marocaine pour le Commerce et l'Industrie (BMCI), the
co-lead managers are Attijariwafa Bank and Caisse de Depot et de Gestion
(CDG) and several other domestic banks acted as selling members of the
syndicate. BNP Paribas acted as financial advisor to IFC on the transaction.
Mr. Fathallah Oualalou, Minister of Finance and Privatization said "I
am very pleased by the successful completion, under excellent market conditions,
of IFC's Moroccan dirham bond issue. This highlights the maturity
of the Moroccan financial market owing to structural reforms initiated
over the past few years. This transaction emphasizes IFC's renewed
confidence in the Moroccan economy and its outlook, which paves the way
for even a stronger support by IFC to the development of Morocco's private
sector." In coordination with the Ministry of Finance,
it has been decided that the market in which domestic bonds are issued
by foreign entities in Morocco will be know as the “Atlas” market.
This “Atlas” bond issue is part of IFC’s continued support to Morocco.
“Given IFC’s focus on the private sector, the development of
the domestic market is a priority in order to give clients better access
to local currency financing, especially in longer term maturities”
said Nina Shapiro, IFC’s Vice President Finance and Treasurer.
“During the last two years, IFC has been working closely with the Moroccan
authorities to prepare for this transaction. We are pleased that
this transaction has come to fruition so smoothly, and are pleasantly surprised
with the placement with over 20 institutional investors” said John
Groesbeek, Senior Financial Officer.
IFC has been providing technical assistance to the government and the private
sector in Morocco, to help shape a more efficient financial sector. A
more effective capital market will also support Morocco’s efforts to develop
a corporate governance culture that will enhance investor confidence.
This transaction fits IFC's strategy of developing domestic capital markets
worldwide. Recently, IFC was also the first domestic issuers in the
Malaysian Islamic bond market, the Peruvian Soles bond market and the Colombian
Peso bond market. By doing these transactions, IFC is helping the development
of domestic markets in order to give better access to long term financing
for local companies. These operations also establish IFC's credit in the
local markets, thus creating the framework to follow with structured transactions.
IFC funds its lending activities by issuing bonds in the international
capital markets. The Corporation's securities, which are rated Aaa
by Moody's and AAA by S&P, have been issued in 31 different currencies.
IFC's funding program for fiscal year 2005 is around $3.0 billion.
IFC has been the first, or among the first, nonresidents to issue
in many currencies including Malaysian ringgits (Islamic issue), Peruvian
soles, Colombian pesos, Spanish pesetas, Portuguese escudos, Greek drachmae,
Hong Kong dollars and Singapore dollars in the domestic markets, and in
Czech koruna, Philippine pesos, and Polish zloty in the eurobond markets.