Morocco’s OCP Raises $1.55 Billion in Debut Sale of Bonds

OCP Group, which controls the world’s largest phosphate reserves, raised $1.55 billion in its debut international bond sale to help finance a $17 billion investment plan.

State-controlled OCP, based in Casablanca, sold $1.25 billion of 10-year bonds yesterday to yield 5.75 percent, or about 3.1 percentage points more than similar-maturity U.S. Treasuries, according to data compiled by Bloomberg. OCP also issued $300 million of 30-year debt to yield 7.375 percent, or 3.9 percentage points more than Treasuries.

OCP, the world’s biggest phosphate exporter, said in October it would invest 140 billion dirhams ($17 billion) to increase its market share of fertilizers to 40 percent by 2020. Its market share currently stands at 21 percent, OCP Chairman Mostafa Terrab told Le Matin newspaper last week.

A “favorable market risk environment was probably the main supportive factor, but the positive story of the company and Morocco’s improving external perception did help,” Samir Gadio, an emerging markets strategist at Standard Bank Plc in London, said by e-mail yesterday.

OCP is rated BBB- by Standard & Poor’s, the lowest level of investment grade, and an equivalent rank by Fitch Ratings, the same as Morocco’s government rating.

Proceeds will be used for capital expenditures and general corporate purposes, Ghita Laraki, a Casablanca-based spokeswoman for OCP, said in an e-mail. Barclays Plc, JPMorgan Chase & Co., and Morgan Stanley arranged the sale.

Meryem Chami, OCP’s executive director of planning and steering, said in October that the company should capture half of expected growth in global demand for phosphate-based fertilizers by tripling production capacity and focusing on Africa and South America.

Last month, OCP signed an agreement to build four plants in Morocco and Gabon at a total cost of $2 billion to produce fertilizers for African markets intended to meet 30 percent of the continent’s needs.

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