RABAT (Reuters) - Morocco’s government plans to raise 1 billion euros from a revived sale of a euro-denominated bond issue to finance part of its bold investment projects, two senior government officials told Reuters on Saturday.
“We aim for 1 billion euros from the planned sovereign debt issue,” one of the officials said on the sidelines of an economic conference in Rabat.
Another said: “We have in mind at least 1 billion euros to raise from this euro-bond issue but the precise amount will be decided on the spot by a team travelling for an investor roadshow in Europe.”
Both officials declined to be named because the government does not want to unveil in advance the precise amount it is seeking from the planned bond issue.
Asked if the government was aiming for 1 billion euros from the planned issue, Finance Minister Slaheddine Mezouar said:
“We are ambitious for the amount from this bond. One billion euro is possible but I will not tell the precise figure because I do not want to condition the market for our bond issue.”
“We need that money to finance part of our ambitious investment projects,” added Mezouar in reference to a plan to invest about $30 billion over the next 15 years in roads, farming reform and renewable energy schemes to spur growth.
Morocco had mandated three banks Barclays Capital, HSBC and Natixis to jointly lead manage the deal following an investor roadshow that begins on Monday.
“The deal on the precise amount of the bond will be concluded on September 28 with the pricing of the bond fixed and other related details announced,” said a senior aide to the finance minister.
Both Standard & Poor’s and Fitch Ratings rate Morocco at an investment-grade credit rating of BBB-minus, just above junk status.
Moody’s Investors Service has Morocco listed at Ba1, the top tier of junk status.
Early this year, Morocco had planned to launch a global bond denominated in euros but later shelved the plan as the government deemed the market circumstances unfavourable.
“The government now sees the market climate in a better light including the interest rate levels as good,” said a government economist.
“The low level of Morocco’s foreign debts at around 20 percent of its GDP is an advantage to sell the bond on the global market,” he said.
“The investment grade rating is a good indicator for investors willing to buy Moroccan debt paper,” he added.
He said he expected the amount Morocco would raise from the planned bond issue to depend mainly on interest rates.
“If the interest rate offered to Morocco in the bond sale is between 4 percent and 4.5 percent, the government will be interested in raising 1 billion euros or likely more at that price,” the economist said.