Morocco's OCP secures ‘BB’ rating for planned hybrid bond issuance

Morocco’s phosphate group OCP has received a ‘BB’ rating from S&P Global Ratings for a planned issuance of hybrid bonds in U.S. dollars. The bonds, to be issued in U.S. dollars, will come in one or two tranches, with terms starting at just over five and 10 years, although the final size will depend on market conditions, S&P said in a note on Tuesday.

S&P said the rating reflects the higher risk of these bonds, as they are subordinated and allow OCP to delay interest payments if needed. However, the agency considers this risk to be limited.

OCP plans to use the funds to finance its investment program and general operations, which should strengthen its liquidity and financial flexibility.

These bonds will partly be treated as equity, helping improve OCP’s financial profile. They also include gradual interest increases over time, which could encourage the company to repay them later.

Overall, S&P views this issuance as a long-term financing tool that will support OCP’s strategy while maintaining solid financial buffers.