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Marrakech – OCP S.A. announced on Wednesday that it completed a MAD 5 billion ($500 million) perpetual subordinated bond issuance through a public offering on the Moroccan capital market. The entire amount was placed with domestic institutional investors.
The phosphate group structured the issuance across four unlisted tranches, all tradeable over the counter. Each bond carries a par value of MAD 100,000 ($10,000). The instruments have no maturity date and no repayment guarantee. They include options for early redemption and for deferring interest payments.
Coupon rates for the first period range from 2.87% to 4.82% depending on the tranche. They are built on Bank Al-Maghrib’s secondary market Treasury bond reference rates published on June 1, 2026, plus a risk premium that rises with each reference maturity. Tranche A, revisable annually against the 52-week Treasury rate of 2.27%, carries a 60 basis point premium for a first-year coupon of 2.87%. Tranche B, revisable every six years at a reference rate of 2.94%, adds 70 basis points for 3.64%. Tranche C, revisable every 12 years at 3.38%, carries 80 basis points for 4.18%. Tranche D, revisable every 20 years at 3.72%, adds 110 basis points for 4.82%.
OCP described the transaction as reinforcing “the Group’s economic equity and financial flexibility, in continuity with its proactive capital management strategy.”
Demand tilted sharply to the short end
Each tranche was initially capped at MAD 1.25 billion ($125 million). The allocation mechanism was designed to absorb excess demand by raising caps on longer-dated tranches first – starting with Tranche D, then C, then B, and finally A – in increments of MAD 250 million ($25 million).
The actual outcome reversed that logic entirely. Tranche A, the shortest reference maturity, absorbed MAD 3,935 million ($393.5 million) – more than three times its original ceiling and roughly 79% of the total issuance. A total of 39,350 bonds were allocated on that tranche alone. Tranche B drew MAD 360 million ($36 million) across 3,600 bonds. Tranche C attracted MAD 460 million ($46 million) across 4,600 bonds. Tranche D, despite carrying the highest risk premium, received just MAD 245 million ($24.5 million) across 2,450 bonds. All three longer-dated tranches settled below their initial ceilings.
Subscribers effectively opted for a perpetual instrument while limiting their interest rate exposure through annual coupon resets on Tranche A. The concentration on the shortest maturity inverted the allocation hierarchy that the deal’s structure had anticipated.
OPCVM accounted for 85% of the placement
By subscriber category, collective investment funds – known in Morocco as OPCVM – received MAD 4,225 million ($422.5 million), representing approximately 85% of the total allocation. Retirement and pension funds were allocated MAD 500 million ($50 million). Insurance and reinsurance companies received MAD 275 million ($27.5 million). Financial holding companies, credit institutions, and the Caisse de Dépôt et de Gestion received no allocation.
OCP’s press release stated the operation brought together “a diversified base of leading institutional investors: collective investment funds, insurance and reinsurance companies, as well as retirement and pension organizations.” The group did not disclose total order volume or an oversubscription ratio for the domestic transaction.
A hybrid that straddles debt and equity
Perpetual subordinated bonds are hybrid instruments. They combine characteristics of debt and equity. Their perpetual nature, subordinated ranking, and the issuer’s option to defer coupon payments typically allow rating agencies to classify a portion of the instrument as quasi-equity. This bolsters economic equity on the balance sheet without issuing new shares or producing an immediate increase in reported leverage.
Each tranche incorporates a step-up mechanism that creates an incentive for eventual redemption. A 25 basis point increase applies at the first optional call date. An additional 75 basis points kicks in roughly 20 years later. Tranches A and B share a first call window on June 23, 2032, with the additional step-up effective from June 23, 2052. Tranche C’s first call falls on June 23, 2038, with its secondary step-up in 2058. Tranche D opens its call window on June 23, 2046, with the additional increase in 2066. OCP provides no guarantee that it will exercise any of these options.
OCP’s media brief described the instrument as “particularly suited to groups carrying a strong growth and investment trajectory, in line with the practices of major international issuers.”
Fourth domestic hybrid since 2016
This is OCP’s fourth hybrid issuance on the Moroccan market since 2016. It follows the group’s international hybrid bond of $1.5 billion completed in April. That transaction was oversubscribed 4.6 times by 176 investors from 23 countries, priced at coupons of 6.74% and 7.37%.
The dirham-denominated coupons on the domestic deal are considerably lower than the dollar coupons on the international tranche. The gap reflects the difference between the two interest rate environments rather than a reduced credit risk.
OCP stated that the issuance “confirms the Group’s ability to mobilize institutional savings and to access capital markets through a diversified range of instruments.” The company described the transaction as having been “planned well in advance in the Group’s financial roadmap” and “validated upstream by its governance bodies.”
Proceeds feed a $13 billion investment program
The hybrid bond proceeds support OCP’s 2023-2027 investment cycle, estimated at approximately $13 billion. The plan aims to raise the group’s plant nutrition solutions production capacity from roughly 15 million to 20 million tons by 2027. Major infrastructure components include the Meskala mine and the Mzinda industrial complex. OCP is also pursuing water self-sufficiency and carbon neutrality by 2040.
The group closed fiscal year 2025 with revenue of MAD 113.9 billion ($11.39 billion) and an EBITDA margin of approximately 38%. Net debt stood at around $13 billion, placing net leverage at roughly 2.76 times EBITDA.
OCP holds a Baa3 rating from Moody’s with a stable outlook – one notch above Morocco’s sovereign rating. S&P assigns BBB-. Fitch rates the group at BB+. The repeated use of hybrid instruments reflects a strategy of extending funding horizons and mobilizing long-term resources without compressing the credit profile the group has worked to maintain.
CDG Capital and Attijari Finances Corp. served as advisors. CDG Capital and Attijariwafa Bank handled the placement.
Read also: OCP Reports MAD 20 Billion in Revenue for Q1 2026
