Wafasalaf, Morocco’s leader in consumer financing, has unveiled a major financial initiative: a subordinated bond issuance worth 200 million dirhams ($19.5 million). This move is designed to bolster the company’s regulatory capital while supporting its strategic projects and diversifying its funding sources.
The bond issuance stands out with a seven-year maturity, featuring a bullet repayment of the principal at the end of the term. Notably, no guarantees are attached to this operation, highlighting the company’s solid financial foundation and the trust it enjoys from investors. Each bond will carry a nominal value of 100,000 dirhams and will be traded over-the-counter (OTC), rather than on the stock exchange.
A two-tranche offering tailored for investor appeal
The issuance is divided into two tranches, each offering distinct interest rate options:
- Fixed-rate tranche:
This tranche is pegged to Morocco’s seven-year Treasury bond yield as published by Bank Al-Maghrib on December 13, 2024, at 3.14%. An additional risk premium of 70 basis points brings the final fixed rate to 3.84%. - Floating-rate tranche:
The floating-rate option is also linked to the seven-year Treasury bond yield, which stood at 2.78% on the same reference date. A risk premium of 60 basis points is added, resulting in an initial rate of 3.38% for the first year. The rate will be revised annually.
This bond issuance has received the green light from the Moroccan Capital Market Authority (AMMC) under reference number 038/2024EM/VI on December 13, 2024. The approved prospectus includes a detailed note on the operation as well as Wafasalaf’s financial performance for 2023 and the first half of 2024.
This initiative is a testament to Wafasalaf’s commitment to diversifying its financing mechanisms and aligning with investor expectations. By providing structured and transparent conditions, the company underscores its financial robustness and proactive approach in navigating Morocco’s financial markets.
Why this matters ?
For investors, the dual-tranche structure provides options to suit varying risk and return profiles, while Wafasalaf secures the capital needed to continue its leadership in Morocco’s consumer financing sector. With this issuance, Wafasalaf not only strengthens its financial position but also reaffirms its reputation as a key player in the market.
