Morocco marks financing first: African Development Bank debuts billion-dirham bond

Morocco was selected because of its established partnership with the bank, the size of the institution’s operations in the country and client demand for dirham financing.

The African Development Bank has completed its first bond issuance in Moroccan dirhams, raising one billion dirhams through a private placement with qualified investors. The seven-year bond carries a floating interest rate linked to the Moroccan Overnight Index Average, known as MONIA. The transaction introduces the dirham into the bank's financing offering in Morocco, alongside its main lending currencies, including the euro and the US dollar.

The issuance forms part of the bank's broader effort to expand local currency financing and provide solutions suited to a wider range of clients. Adding dirham financing will give the institution greater scope to respond to clients seeking funding in Morocco's domestic currency. The bank considers the development of local currency financing a strategic priority, with this transaction serving as a pilot for its broader work.

Morocco was selected because of its established partnership with the bank, the size of the institution's operations in the country and client demand for dirham financing. The maturity of Morocco's financial ecosystem also supported launching the initiative there. Experience gained from the transaction will help guide the gradual introduction of financing in other African currencies.

Dedicated dirham portfolio under consideration

The bank is considering establishing a dedicated dirham treasury portfolio to support the development of its local currency financing capabilities in Morocco. Part of that portfolio could be funded by converting a portion of the institution's existing foreign currency liquidity into dirhams. The proposal remains under consideration and represents a possible next step in building the bank's capacity to provide domestic currency financing.

Financial market development forms part of the strategy

The African Development Bank intends to work with the Moroccan government and local market participants to deepen the country's financial market. Its planned contribution includes supporting the development of hedging instruments and strengthening liquidity in the derivatives market. This work would extend the initiative beyond the inaugural bond, connecting the bank's financing activities with the development of Morocco's wider financial ecosystem.

Moroccan institutions and advisers support the transaction

The bank, Moroccan authorities, and local financial market participants collaborated to complete the issuance, with investors and other partners contributing to its completion. The bank acknowledged support from the Ministry of Economy, Finance and Public Performance, Bank Al-Maghrib and the Moroccan Capital Markets Authority, known as AMMC. Attijari Finances Corp. served as financial adviser, with Attijariwafa Bank and CDG Capital acting as lead managers and supporting the transaction's structuring and execution.