Perpetual subordinated debt issue of up to MAD 1,000,000,000 with a loss absorption and coupon payment cancellation provision
The prospectus approved by the AMMC comprises:
The offer document
Tranche A
(adjustable every 5 years - unlisted)
Tranche B
(adjusted annually - unlisted)
BANK OF AFRICA's reference document for the 2024 financial year, registered by the AMMC 13 June 2025, reference number EN/EM/006/2025.
Maximum size
MAD 1,000,000,000
Maximum number of securities
10,000 perpetual subordinated notes
Nominal value
MAD 100,000
Securities' tradability
Over-the-counter (not traded on the Casablanca Stock Exchange)
Nominal interest rate
Adjustable every 5 years
For an initial 5-year period, the nominal interest rate will be based on the 5-year rate, in turn based on the 5-year benchmark yield for Treasury bonds traded on the secondary market as published by Bank Al-Maghrib 16 June 2025, plus a risk premium
Adjustable annually
For the first year, the nominal interest rate will be based on the full 52-week rate, in turn based on the benchmark yield for Treasury bonds traded on the secondary market as published by Bank Al-Maghrib 16 June 2025, plus a risk premium
Risk premium
Between 220 and 230 basis points
Between 210 and 220 basis points
Repayment guarantee
No specific guarantee is provided in respect of this issue
Maturity
Perpetual, with the possibility of early repayment from the 5th anniversary of the cum-coupon date, and only at the issuer's request, on condition that notice of at least five years is given and with Bank Al-Maghrib's prior approval
Allotment method
French auction method with priority given to Tranche A (floating rate adjustable every 5 years) and then Tranche B (rate adjustable annually)
Subscription period: 20 June 2025 to 24 June 2025 inclusive
Only those qualified Moroccan investors listed in this offer document may subscribe for these notes and trade them on the secondary market
Advisory institution Book-runner
MOROCCAN CAPITAL MARKETS AUTHORITY'S VISA
In accordance with the provisions of the AMMC circular published in application of Article 5 of Act No. 44-12 relating to public offerings and information required of legal entities and organisations making a public offering, this prospectus has been approved by the AMMC 13 June 2025, reference number VI/EM/018/2025.
The offer document forms only part of the prospectus approved by the AMMC. The latter comprises the following documents:
This offer document
BANK OF AFRICA'S reference document for the 2024 financial year, registered by the AMMC 13 June 2025, reference number EN/EM/006/2025.
WARNING
The prospectus approved by the Moroccan Capital Markets Authority (AMMC) comprises the following documents:
The offer document
BANK OF AFRICA's reference document for the 2024 financial year, registered by the AMMC 13 June 2025, reference number EN/EM/006/2025.
Potential investors are asked to read the information contained in each of the aforementioned documents prior to making their decision on whether to participate in the transaction referred to in this offer document.
The visa of the Moroccan Capital Markets Authority (AMMC) does not imply that it approves the opportunity presented by this transaction nor that it authenticates the information presented. The visa has been granted following a review to ensure that the information given to investors in respect of the proposed transaction is relevant and consistent.
The attention of potential investors is drawn to the fact that investing in financial instruments incurs risk.
The AMMC does not comment on whether the proposed transaction is appropriate or provide qualitative judgement of the issuer's position. Neither does the AMMC visa offer any safeguard against the risks associated with the issuer or the securities offered in the context of the transaction referred to in this prospectus.
Investors must therefore ensure, prior to subscribing, that they have a good understanding of the nature and characteristics of the securities offered and that they are able to manage their exposure to the risks inherent in the said securities.
Investors are therefore asked to:
Carefully read each of the documents and the information provided, especially that provided in this offer
document's Risk Factors section as well as in the aforementioned registration document.
Consult, if necessary, any professional who is competent in matters of investment in financial instruments.
The aforementioned prospectus is not intended for persons who are not legally authorised to participate in the proposed transaction due to their place of residence.
Persons who may happen to have a copy of the said prospectus in their possession are invited to make the necessary enquiries to ensure that they comply with the regulations which govern their participating in this type of transaction.
The financial instruments referred to in the aforementioned prospectus will only be offered by the transaction's book-runner in strict accordance with the current laws and regulations in those countries in which the latter will make such an offer.
Neither the Moroccan Capital Markets Authority (AMMC) nor BMCE Capital Conseil shall be liable in the event that the book-runner fails to comply with such laws or regulations.
A perpetual subordinated note differs from a classic bond in terms of the rank of claims contractually defined by the subordination clause as well as it not having any maturity date.
The effect of the subordination clause is, in the event of the issuer's liquidation, to subordinate the repayment
of the note to that of all other obligations, including the fixed-maturity subordinated notes that have already
been issued and those which might subsequently be issued. The principal and interest relating to these securities constitute a subordinated obligation which ranks or will rank only above BANK OF AFRICA's equity securities.
The attention of potential investors is also drawn to the fact that:
This perpetual debt issue has no set maturity date but may be redeemed whenever the issuer chooses with Bank Al-Maghrib's prior approval, which might in turn have an impact on the expected maturity and the conditions for reinvesting.
Investment in perpetual subordinated notes includes clauses for writing down the securities' nominal value
and cancelling interest payments.
PART I: Overview of BANK OF AFRICA's perpetual subordinated debt issue
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Offer structure
BANK OF AFRICA envisages issuing 10,000 perpetual subordinated notes, each with a nominal value of 100,000 dirhams. The overall amount issued will be 1,000,000,000 dirhams, broken down as follows:
Tranche A, a perpetual note with no maturity date, 5-year adjustable rate, not listed on the Casablanca Stock Exchange, for up to 1,000,000,000 dirhams, the nominal value of each security being 100,000 dirhams
Tranche B, a perpetual note with no maturity date, rate adjustable annually, not listed on the Casablanca Stock Exchange, for up to 1,000,000,000 dirhams, the nominal value of each security being 100,000 dirhams
The total amount allotted to both tranches must not under any circumstances exceed 500,000,000 dirhams. In the event that this debt issue is not fully subscribed, the amount issued will be limited to the amount actually subscribed.
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Transaction aims
The primary aims of this transaction are to:
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Transaction aims
Support the Bank in implementing its financial strategy up to 2027 and to ensure that it complies with regulatory requirements
Finance the Bank's organic growth in Morocco and overseas
Pre-empt changes to regulatory requirements in those countries in which it has operations.
In accordance with Bank Al-Maghrib's Circular No. 14/G/2013, as amended and completed, as to how credit institutions should calculate regulatory capital, the funds raised from this transaction will be classified as additional Tier 1 capital.
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Information about BANK OF AFRICA's perpetual subordinated notes
Warning
A perpetual subordinated note differs from a classic bond in terms of the rank of claims contractually defined by the subordination clause as well as it not having any maturity date. The effect of the subordination clause is, in the event of the issuer's liquidation, to subordinate the repayment of the note to that of all other obligations, including the fixed-maturity subordinated notes that have already been issued and those which might subsequently be issued.
The principal and interest relating to these securities constitute a subordinated obligation which ranks or will rank only above BANK OF AFRICA's equity securities. The attention of potential investors is also drawn to the fact that:
This perpetual debt issue has no set maturity date but may be redeemed whenever the issuer chooses with Bank Al-Maghrib's prior approval, which might in turn have an impact on the expected maturity and the conditions for reinvesting.
Investment in perpetual subordinated notes includes clauses for writing down the securities' nominal value and cancelling interest payments, exposing investors to the risks outlined in Section V of this part of the offer document.
- Characteristics of Tranche A
Characteristics of Tranche A (Floating rate notes, rate adjustable every 5 years, not listed on the Casablanca Stock Exchange)
Type of securities issued
Perpetual subordinated notes not listed on the Casablanca Stock Exchange,
entirely in non-physical form and registered in a financial intermediary's
account at Maroclear, the central securities depositary
Legal form Notes in bearer form
Maximum tranche size MAD 1,000,000,000
Maximum number of securities issued 10,000 perpetual subordinated notes
Nominal value MAD 100,000
Issue price 100% of the nominal value, i.e. MAD 100,000
Perpetual, with the possibility of early repayment from the 5th anniversary of
Maturity
the cum-coupon date, only at the request of the issuer, on the condition that notice of at least five years is given and with Bank Al-Maghrib's prior approval
Subscription period 20-24 June 2025 inclusive
Cum-coupon date 26 June 2025
French auction method with priority given to Tranche A (floating rate
Allotment method
adjustable every 5 years), then Tranche B (rate adjustable annually)
Nominal interest rate
Floating rate adjustable every 5 years
For the first 5 years, the nominal interest rate will be based on the benchmark yield for 5-year Treasury bonds traded on the secondary market as published by Bank Al-Maghrib 16 June 2025, plus a risk premium of between 220 and 230 basis points.
This benchmark yield will be published 17 June 2025 by BANK OF AFRICA on its website and 17 June 2025 in a gazette containing legal notices.