Morocco has delayed its maiden dollar bond sale to end-November pending market stability, the budget minister said in published remarks on Wednesday, but banks have already been mandated for an issue that may exceed the initial $1 billion mark.
The delay's announcement, carried by L'Economiste newspaper, comes amid intense speculation King Mohammed would soon make a rare official tour of the Gulf Arab region from where Rabat hopes to raise a substantial share of the issue.
Initially estimated at $700 million-$1 billion, the cash-strapped country now says it may go for more.
"It (size of the issue) will depend on the kind of offer we will be getting from investors," the newspaper quoted Idriss Azami al-Idrissi as saying. He added that leads for the issue have already been mandated, but declined to name them.
The minister and his aides could not immediately be reached for a comment.
Earlier this month, the central bank governor hinted at a possible delay.
Morocco said in August it planned to sell the bond in October, shortly after securing a $6.2 billion precautionary credit line from the International Monetary Fund.
Officials have rejected any links between the newfound flexibility offered by the IMF deal and the new bond issue, which is expected to have a "medium-term" maturity.
This is the first time that Morocco, a relative newcomer to the international sovereign bond market, has given serious consideration to a greenback-denominated issue.
Morocco's dirham currency, while not convertible, is pegged to a basket of currencies in which the euro accounts for 80 per cent of the total weighting and the dollar for 20 percent. The breakdown reflects Morocco's trade exchanges.
The $90-billion economy is heavily anchored to the euro zone whose troubles have hit tourism revenues, migrant transfers and foreign investment this year.
In its most recent international bond sale, Rabat raised about 1 billion euros in 2010 after 500 million euros from a similar issue in 2007. Both issues had a ten-year maturity.
Western diplomats said Moroccan ruler King Mohammed plans to make a rare official tour soon of oil-exporting Arab countries to seal a partnership with the six-nation Gulf Cooperation Council (GCC) and attract badly-needed investment.
Sources familiar with the pending bond issue have told Reuters that around half may be allocated to institutional investors from Gulf Arab countries.
In July, King Mohammed urged his government to tap financing from Gulf Arab sovereign wealth funds to help with projects Morocco hopes will help it meet pressing social needs, in what was seen as an important policy shift for the monarch.