RABAT – Morocco is drafting a law to allow the sale of Islamic bonds, joining North African neighbors seeking to lure more investors to their debt after global sukuk offerings surged to a record. The government will put the bill to parliament as soon as the draft is completed, Budget Minister Driss Elazami Eldrissi said by phone on Nov.20. He wouldn't say when that would happen. Tunisia and Egypt, two other North African countries ruled by Islamist parties after last year's uprisings, are also drafting laws to pave the way for possible sukuk sales in 2013. Selling Islamic bonds helps issuers “reach conventional debt investors and sukuk investors at the same time,” Elhassan Eddez, deputy director of treasury at Morocco's Finance Ministry, said by phone Nov. 20. “The sukuk market has a wider investor base.” Global sales of bonds that comply with Islam's ban on interest soared 66 per cent this year to a record $43.4 billion as nations such as Turkey and Qatar tapped the market for the first time, taking advantage of falling borrowing costs. The average yield on sovereign sukuk dropped 116 basis points, or 1.16 percentage points, this year to 2.74 per cent on November 23, the lowest since 2009, according to the HSBC/Nasdaq Dubai Sovereign US Dollar Sukuk Index. The kingdom, which is preparing to sell its first dollar-denominated bonds, secured a $6.2 billion funding line from the International Monetary Fund in August as a shield against the repercussions of the debt crisis in Europe, Morocco's main trading partner. Morocco has managed to keep its BBB-rating at Standard & Poor's The yield on Morocco's 4.5 percent euro-denominated bonds due October 2020 has fallen 127 basis points to 4.61 percent on Nov. 23, compares with a 139 basis-point drop in average yield of sukuk issued in the GCC. — Agencies
