Morocco raises 400m in Eurobond issue as investors shrug off fears, FT Writes
Morocco, Economics, 6/30/2003

The first 400m ($457m, £275m) eurobond Morocco raised Friday in London was seen by The Financial Times (FT) as showing that investors were undaunted by last month's multiple suicide attacks in the Moroccan financial capital Casablanca.

FT quoted Fathallah Oualalou, finance and privatisation minister, who signed the Eurobond deal as saying "Foreigners' reaction has been positive - there has been a wave of solidarity.

According to the daily, senior Moroccan officials said the government's swift crackdown and the support inside and outside the country had maintained investors' appetite in the bond deal.

The five-year issue, which the government had talked about for years but only now decided to launch, was priced to yield 2.15 percentage points for a country with a speculative rating.

But up to 25 per cent of the issue, managed by Merrill Lynch & Co and BNP Paribas, was sold to Gulf investors, who tend to be less price-sensitive. Much of the rest was marketed in Europe, FT said.

Proceeds from the bond issue are expected to refinance some of Morocco's more expensive debt.

The deal follows the $1.5bn ( 1.3bn, £900m) sale of 80 per cent of Morocco's state tobacco monopoly earlier this month to a French-Spanish group.

The success of this deal was seen as a sign of investor confidence, the top UK business daily said.

The Eurobond issue comes as the US administration points to Morocco as part of a small group of Arab countries whose economic reforms are advanced enough to deserve a free-trade agreement with the US, said the daily.

Oualalou cited the bond issue as an opportunity for Morocco to market to the world what he called a "project of modernisation and democratisation" as much as to take advantage of favourable market conditions, the daily underlined.

Previous Stories:
  Marrakech, World Women Capital from June 28 to 30   (6/27/2003)
  Morocco registers 3.5 percent economic growth in 2002   (6/26/2003)
  Labor Code set to reinforce partnership between social actors   (6/26/2003)
  Moody's changes Morocco's outlook to stable from negative   (6/21/2003)
  Morocco issues first international bond loan   (6/20/2003)

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