The African Development Bank (AfDB) has raised MAD 1 billion through its first bond issue denominated in Moroccan dirhams, opening the way for the lender to offer more financing in local currency.
The seven-year bond was sold through a private placement to qualified investors and carries a floating interest rate linked to the Moroccan Overnight Index Average (MONIA), the bank announced on Friday.
The transaction will allow the AfDB to add dirham financing to its existing lending in euros and US dollars, giving borrowers in Morocco another currency option.
The bank is also considering setting up a dedicated dirham treasury portfolio, which could be funded partly by converting some of its foreign currency holdings.
Such a portfolio would provide the bank with additional resources for lending in dirhams.
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The AfDB said it chose Morocco for its first local-currency bond issue because of its existing investment portfolio in the country, demand from borrowers for dirham financing and the development of the domestic financial market.
It also plans to work with Moroccan authorities and market participants to develop instruments for managing financial risks and improve liquidity in the derivatives market.
The bank said experience gained from the transaction could help it introduce financing in other African currencies.
Attijari Finances Corp. acted as financial adviser on the issue, while Attijariwafa Bank and CDG Capital served as lead managers.
The transaction was carried out with the involvement of the Ministry of Economy and Finance, Bank Al-Maghrib and the Moroccan Capital Markets Authority (AMMC).
