Morocco says begins bond roadshow

RABAT Fri Nov 23, 2012 2:26pm EST

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RABAT Nov 23 (Reuters) - Morocco confirmed on Friday that it had begun a roadshow to promote a dollar bond issue that will help control a budget deficit, as the North African country tries to manage the effects of the euro zone crisis and Arab Spring dissent.

"It started yesterday," Nizar Baraka told Reuters during a parliament session to discuss a budget for 2013 that has provoked protests over jobs and inflation in Rabat this week.

He declined to give more details about the maiden dollar bond, but media have said the roadshow began in Abu Dhabi.

Initially estimated at $700 million-$1 billion, officials have said it could be more than $1 billion. The central bank governor said last month it would have a "medium-term" maturity.

Official sources have said it could be aimed largely at institutional investors from the Gulf Cooperation Council (GCC), a club of wealthy Arab monarchies which has developed loser ties with Rabat since Arab uprisings erupted in late 2010.

The government has mandated Barclays, BNP Paribas, Citigroup and Natixis to arrange the investor roadshow, expected to last two weeks and include Europe and United States.

Public finances are in dire straits in the country of 33 million because of the financial crisis in the European Union, Morocco's main economic partner, as well as increased social spending introduced to help contain Arab Spring protests.

Morocco's trade deficit was 10 percent higher in October at 163.9 billion dirhams ($19.1 billion) than a year ago, up from a five percent year-on-year increase in September - largely due to a surge in imports, especially energy products and wheat.

But in August the IMF approved a $6.2 billion precautionary line of credit for Morocco over two years, which it said the government would treat as "insurance" in case economic conditions deteriorated and it faced sudden financing needs.

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