Funding: Private Debt Overshadows Banks

Never has the private debt market shown such a high level of activity as in 2025. A remarkable evolution is observed, far greater than that of the last five years, and to which all business sectors have contributed. Both companies and banking institutions are increasingly turning to it to diversify their funding sources.

After being primarily driven by banks last year, the market is now being energized by a broader range of players, from sectors such as real estate (Alliances), healthcare (Akdital), agri-food (Oulmès), public infrastructure (ONDA, Nador West Med…), retail (Label’Vie, Marjane), education (UM6P), construction (Jet Contractors), telecoms (Maroc Telecom), and many others… The market is thus no longer confined to fundraisings initiated by banking institutions.

In 2025, private bond issuances marked a significant jump, reaching nearly 45 billion dirhams, up 90% compared to 2024. It should be noted, however, that the private debt market was particularly supported by the private placement segment.

While bond issues (ordinary, subordinated, or perpetual) amounted to about 11 billion dirhams, those carried out via private placement peaked at 34.8 billion.

This represents over two-thirds of total issuances. Between May and October alone, more than 20 operations were conducted exclusively via private placement, for a volume of 21 billion dirhams.

72% of Bank Outstandings

Private debt is emerging as a serious competitor to bank financing. The outstanding amount of equipment loans, a key indicator of corporate investment levels, increased by 14.6% at the end of November 2025 to reach 278 billion dirhams, compared to an 18% increase a year earlier.

This indicates that the momentum slightly slowed last year, giving way to private debt financing. In detail, the outstanding amount of loans granted to public companies stood at 38.7 billion dirhams, up 16.4%, while that for private companies amounted to 141.7 billion, an increase of 12.7%.

In comparison, the outstanding amount of the private bond market exceeded 200 billion dirhams. This represents 72% of the outstanding equipment loans.

Thus, private debt is gradually catching up with bank loans. Companies increasingly prefer to resort to private bonds for several reasons.

The first concerns the cost of financing. Regardless of the benchmark rate for bond issuances, the rate applied to the operation remains more attractive, ranging between 2.5% and 4%, based on the Treasury bond yield curve.

Moreover, in 2025, these rates stabilized due to a very comfortable situation for the state treasury, controlled issuances, and satisfied investors.

But to these rates is added a risk premium ranging from 50 bps to 150 bps, depending on the issuer, maturity, and the base rate used for calculation. Ultimately, the refinancing rate through these bond issuances generally ranges between 3% and 5%.

Lower Operational Cost

Compared to the rates applied by banks, refinancing on the private debt market appears more competitive. The latest Bank Al-Maghrib survey on lending rates shows that rates applied to companies stood at 4.5% in the third quarter, 4.83% in the second, and 5.15% in the first three months of 2025.

The choice is quickly made! It must be said that this factor is not the only reason. Indeed, these operations may not require guarantees, thereby allowing issuers to reduce the operational cost of financing and gain financial flexibility.

Another significant advantage: the mobilization of financial resources in a short time, thus avoiding the cumbersome processes of banking institutions, credit committee decisions, risk committees… Furthermore, these operations do not affect the debt ratio, leaving companies with interesting room for maneuver to obtain bank financing if needed.

It should also be noted that private placement enjoys even more attractive advantages. In this sense, issuers negotiate over-the-counter with pre-targeted investors, are not required to publish the information memorandum related to the operation, and only have an obligation to inform the AMMC (Moroccan Capital Market Authority), not to obtain its visa, to proceed with the desired bond issuance.

In any case, investors, whether institutional or UCITS, show strong interest in this type of operation, which offers them a known yield at maturity (except for perpetual subordinated bonds), while providing a tool for diversifying investments.

This interest is all the more pronounced as the yields offered are higher than those of Treasury bonds and the issuances come from issuers with credible signatures, characterized by strong fundamentals, robust financial health, or an established reputation, all elements that constitute a guarantee of trust.

The Rise of Negotiable Debt Securities (TCN)

Private debt is not only private bonds but also Negotiable Debt Securities (TCN), which are also on an uninterrupted upward trend.

At the end of December 2025, issuances reached 63 billion dirhams, down 19% compared to 2024. Once again, just as with private bonds, TCN offer attractive market conditions, both in terms of rates, ranging from 2% to 3.3%, and issuance durations, which generally do not exceed two years.

However, these securities are not used to finance corporate growth or strategic projects, but rather to cover short-term cash flow needs. It should be noted that bank issuances, in the form of certificates of deposit, attract nearly half of these TCN, followed by finance company notes and treasury bills.