Soon issues of Treasury bills at variable rates

The Treasury Department intends to use a new instrument to counter the disaffection of investors towards long-term investments, in this environment marked by uncertainty.

These are issues of Treasury bills (BDT) at variable rates. The information was provided by Younes Issami, head of monetary and foreign exchange operations at the Central Bank, during the conference on structural operations for the purchase of Treasury bonds by Bank Al-Maghrib on the secondary market.

“The Treasury takes investors’ needs into account, which is why it launched variable rate issues. (…) It will issue BDTs indexed to 13 or 26 weeks, which respond more to the fears of investors. operators in relation to the increase in key rates,” he said.

A first issue in November 2022

Contacted by Médias24, the Treasury Department confirms that this instrument is indeed envisaged in a more pronounced way in 2023, after a first “test” issue in 2022.

“Last November, the Treasury Department carried out its first issue of variable rate Treasury bonds. These were BDTs with a maturity of five years indexed to 52 weeks. The exercise concerned almost 10 billion dirhams”, reminds us of El Hassan Eddez, head of the debt unit at the Treasury and External Finance Department (DTFE).

“The objective was to provide a new instrument that responds to investors’ fears in a context marked by an upward trend in rates”, specifies our interlocutor.

As the yield curve is on an upward trend, after two successive increases in the key rate and the increase in Treasury rates, of which a major correction was carried out at the start of 2023, investors shun long maturities because they entail a great risk.

They prefer to bet on the short term to minimize risks. This does not help the affairs of the Treasury, which cannot finance itself solely on short maturities, because this increases the debt repayments and the risks of refinancing.

Divergent interests, in an uncertain and sensitive context. An equation to which variable rate BDT issues respond.

“As the rate is variable, the investor is assured that the bonds available to him will follow the rate trend… up and down”, explains El Hassan Eddez.

Programs will be scheduled if demand is there.

The next issues planned by the Treasury concern medium and long maturities indexed on the short term: 3 months, 6 months or one year.

With a variable rate, the coupon rate will be reviewed annually and recalculated according to market conditions.

There is no specific date yet for these shows. Nor will they be systematic. Before launching them, the Treasury intends to probe the market to assess the depth and appetite of investors.

“There must be a significant demand opposite. We are not going to create an instrument to raise 100 MDH or 200 MDH”, we are told.


January 23, 2023 at 7:04 p.m.

Modified January 23, 2023 at 7:20 p.m.

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