OCP has ended its relationship with Fitch Ratings, the only major credit agency that considered the Moroccan phosphate group below investment grade, as rising production costs and weaker fertiliser demand put pressure on its finances. Fitch withdrew all its credit ratings on 12 November after OCP decided to stop participating in the agency’s assessment process. Before withdrawing, Fitch reaffirmed the group’s long-term credit rating at ‘BB+’ with a Stable Outlook. Its senior unsecured debt also retained a ‘BB+’ rating, with a Recovery Rating of ‘RR4’.
The withdrawal is not a downgrade. OCP has said it will not appoint another agency to replace Fitch and that the decision will have no impact on its borrowing.
The move ends a long-standing difference between the three major rating agencies. Moody’s rates OCP Baa3 and S&P Global Ratings gives it BBB-, both investment-grade ratings with stable outlooks. Fitch alone placed the company in speculative-grade territory, according to OCP’s September 2026 bond documentation.
Fitch will no longer publish ratings or provide analytical coverage of the group. Investors will continue to rely on assessments from Moody’s and S&P, as well as OCP’s own financial disclosures.
Why Fitch rated OCP below investment grade
The disagreement between Fitch and the other agencies largely reflects the relationship between OCP and the Moroccan state, which owns 94% of the group.
Fitch considers OCP an investment-grade business on its own merits, giving it a standalone credit profile of ‘bbb-‘. The assessment reflects its large scale, leading position in the global phosphate market, long mine life, low production costs and access to phosphate deposits representing about 70% of the world’s known reserves.
However, Fitch believes government influence over OCP’s strategy, investment decisions and cash flow is strong. The state can influence the group’s finances through taxation and dividend payments.
Under its criteria for government-related companies, Fitch therefore links OCP’s final rating to the sovereign rating of the state.
Fitch affirmed the country’s rating at ‘BB+’ with a Stable Outlook on 17 September 2026, one notch below investment grade.
Other agencies have a more favourable assessment of the sovereign. S&P rates the country BBB-, an investment-grade rating, while Moody’s assigns it Ba1 with a positive outlook. Moody’s rates OCP one notch higher than the sovereign, at Baa3.
Falling revenue and profits
OCP’s first-half results show the financial pressure facing the group in 2026.
Revenue fell by 7.3% in the six months to June, reaching MAD48.37bn ($5bn), compared with MAD52.17bn during the same period in 2025.
Operating earnings, measured by EBITDA, dropped by 28.5% to MAD13.31bn from MAD18.61bn.
The EBITDA margin, which shows how much of every dirham in sales remains as operating earnings, narrowed to 28% from 36%. It fell further to 27% in the second quarter.
Gross margin also declined from 64% to 55%.
The group’s financial result swung from a profit of MAD8.25bn in the first half of 2025 to a loss of MAD2.84bn in the first half of 2026.
OCP says it has performed better than several international competitors. Its first-half EBITDA margin of 28% compared with 22% at PhosAgro, 19% at ICL, 9% at Mosaic and 8% at Nutrien.
The company also says its phosphate EBITDA, measured on a comparable basis in dollars, fell by 26%, against declines ranging from 34% to 51% at Ma’aden, PhosAgro, Mosaic and Nutrien.
Fitch expects OCP’s debt burden to rise further as earnings come under pressure. Its net debt is forecast to reach 4.3 times EBITDA in 2026, before falling to around three times by 2029.
The forecast represents a sharp change from the agency’s previous assessment, which expected average leverage of 2.8 times over 2025-2028.
OCP’s own calculation, which excludes hybrid financial instruments, put net debt at 3.05 times EBITDA at the end of June, up from 2.76 times at the end of 2025.
The sulphur crisis driving costs higher
The main source of pressure is sulphur, an essential ingredient in phosphate fertiliser production that OCP imports.
The conflict in the Middle East, which began on 28 February 2026, disrupted shipping through the Strait of Hormuz. According to S&P Global, the disruption trapped around half of the world’s seaborne sulphur exports.
Prices reached record levels by late May, at $815-$820 a tonne on a free-on-board basis in the Middle East and $1,200 a tonne for deliveries to Brazil. Free-on-board prices, which exclude shipping and insurance costs, had climbed above $1,000 a tonne by July.
Export restrictions in Russia, extended until the end of 2026, and restrictions in Kazakhstan further tightened supplies. Ammonia, another important raw material used by OCP, was also affected.
OCP says the increase in its sulphur purchasing costs alone was greater than the decline in its EBITDA.
Higher fertiliser prices also made products less affordable for farmers, reducing imports in India, Europe and Africa. Demand in Brazil held up better, leading OCP to shift more sales towards the Americas.
Fitch says OCP has received all its contracted sulphur volumes so far and is working to diversify its suppliers through 2026.
TSP helps limit the damage
OCP has responded to the shortage by changing the types of fertilisers it produces.
The group has increased output of triple superphosphate (TSP), which requires less sulphur than di-ammonium phosphate (DAP) and mono-ammonium phosphate (MAP), and does not require ammonia.
TSP accounted for 35% of OCP’s fertiliser export volumes in the first half of 2026, up from 26% a year earlier.
A third TSP production line at the Jorf Lasfar industrial complex, with an annual capacity of about one million tonnes, started operating in July.
The shift was already part of OCP’s long-term strategy, but the supply crisis has accelerated the change. Fitch says it has helped limit the impact on profit margins and expects TSP’s share of production to continue increasing.
OCP has also brought forward some maintenance work originally planned for the second half of the year, moving it into the second quarter when production volumes were lower.
Expansion plans and investment cuts
OCP plans to increase its production capacity from 15.4 million tonnes to 20 million tonnes by 2027.
The expansion builds on the group’s access to phosphate deposits representing about 70% of the world’s known reserves, its large mining operations and relatively low production costs.
Fitch says most projects planned beyond 2026 have not yet been firmly committed. This gives OCP room to delay or reduce investment depending on market conditions, debt levels and available cash.
The group has already started adjusting its spending.
Capital expenditure fell by 36% year-on-year in the second quarter to MAD5.9bn, from MAD9.2bn. It was also 42% lower than in the first quarter.
However, spending across the first half of 2026 still increased by 6% to MAD16.07bn, following a 71% jump in capital expenditure during the first quarter.
Fitch expects investment spending to reach about MAD19bn in 2026 and MAD20bn a year from 2027.
The agency expects growth investments to remain broadly in line with cash generated from operations. Dividend payments are also expected to be adjusted according to financial performance.
Despite these measures, Fitch forecasts neutral or negative free cash flow over the next four years. This means OCP is unlikely to generate significant cash left over after operating costs and investment spending.
New borrowing and cash reserves
OCP has turned to hybrid financing to support its expansion and protect its balance sheet.
In April 2026, the group issued $1.5bn in perpetual subordinated notes, the first dollar-denominated hybrid bond issued by an African company.
The deal included a $1bn tranche that can be called after 5.25 years, carrying a 6.74% coupon, and a $500m tranche callable after 10.25 years, with a 7.37% coupon.
The issue attracted around $6.9bn in orders from 176 investors across 23 countries.
In June, OCP issued MAD5bn in domestic perpetual subordinated notes, fully placed with institutional investors.
The group raised a further $149.9m in September through an additional issue of the 10.25-year dollar-denominated tranche.
The notes have no fixed repayment date and rank behind most of the company’s other debt. OCP can defer interest payments, although unpaid coupons accumulate.
Fitch gives these instruments 50% equity credit, the same treatment it applies to MAD15bn in perpetual notes previously issued by the group.
At the end of June, OCP held MAD32.7bn in cash and cash equivalents against MAD24.2bn in short-term debt maturities. This left the company with a cash cushion of MAD8.5bn.
Fitch expects OCP’s ability to control investment spending, together with its historically strong access to financing, to help protect its liquidity.
Recovery expected by 2029
Fitch expects the fertiliser market to recover gradually as buyers use up existing stocks and supply conditions improve.
Lower prices for raw materials and fertilisers should help demand recover.
The agency forecasts that OCP’s sales volumes will reach 32 million tonnes by 2029. Its EBITDA margin is expected to recover to 37%, from a projected 28% in 2026.
The group’s net debt relative to EBITDA is also expected to fall from 4.3 times in 2026 to around three times by 2029.
OCP’s large phosphate reserves, competitive production costs and ability to adjust investment spending are expected to support its recovery.
Fitch’s departure leaves OCP with two major international rating agencies, Moody’s and S&P Global Ratings, both of which continue to rate the group at investment-grade level.
