FONDS D EQUIPEMENT COMMUNAL PROSPECTUS SUMMURAY. ISSUANCE OF ORDINARY BONDS Total amount of the issuance: 2,000,000,000 Dh

Transcription

1 FONDS D EQUIPEMENT COMMUNAL PROSPECTUS SUMMURAY ISSUANCE OF ORDINARY BONDS Total amount of the issuance: 2,000,000,000 Dh Category Cap Maximum number Nominal value Nominal interest rate as of June 19, 2018 Tranche A Tranche B Tranche C Tranche D Tranche E Tranche F Tranche G Tranche H Tranche I Non-Listed Non-Listed Non-Listed Non-Listed Listed Non-Listed Listed Non-Listed Listed Conventional Conventional Conventional Subordinated Subordinated Subordinated Subordinated Subordinated Subordinated Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds 2,000,000,000 Dh Fixed Between 3,84% and 4,14% By reference to the sovereign rate repayable annually of 15 years as of 19/06/2018 Reviewable on an annual basis Between 2,77% and 3,07% For the 1 st year, by reference to the TMP6M base as of 19/06/2018 Reviewable on an annual basis Between 2,87% and 3,17% For the 1 st year, by reference to the TMP6M base as of 19/06/2018 Fixed Between 4,14% and 4,44% By reference to the sovereign rate repayable annually of 15 years as of 19/06/ ,000 bonds 100,000 Dh Fixed 4,14% By reference to the sovereign rate repayable annually of 15 years as of 19/06/2018 Reviewable on an annual basis Between 2,97% and 3,27% For the 1 st year, by reference to the TMP6M base as of 19/06/2018 Reviewable on an annual basis 2,97% For the 1 st year, by reference to the TMP6M base as of 19/06/2018 Reviewable on an annual basis Between 3,17% and 3,47% For the 1 st year, by reference to the TMP6M base as of 19/06/2018 Reviewable on an annual basis 3,17% For the 1 st year, by reference to the TMP6M base as of 19/06/2018 Risk premium Between 60 and 90 bps Between 50 and 80 bps Between 60 and 90 bps Between 90 and 120 bps 90 bps Between 70 and 100 bps 70 bps Between 90 and 120 bps 90 bps Subscription price Gross actuarial rate Par value Par value Par value Par value N/A N/A N/A N/A Between 98.10% and %, Between 4,14% and 4,44% which represents a spread between 90 and 120 bps Par value N/A Between 99.71% and %, Between 2,97% and 3,27% which represents a spread between 70 and 100 bps Par value N/A Between 99.71% and %, Between 3,17% and 3,47% which represents a spread between 90 and 120 bps Maturity 15 Years 10 Years 15 Years 15 Years 15 Years 10 Years 10 Years 15 Years 15 Years Over-thecounter Over-the-counter counter Casablanca counter Over-the- At the Over-the- Over-thecounter Stock Ex Casablanca At Casablanca At the Tradability of Over-the-counter the securities (Off the market) (Off the (Off the market) (Off the Stock (Off the (Off the market) change Stock Exchange market) market) Exchange market) Repayment Method Allocation method Linear annual depreciation of the principal In fine Linear annual depreciation of the principal Linear annual depreciation of the principal Linear annual depreciation of the principal In fine Dutch auction without prioritization between tranches In fine SUBSCRIPTION PERIOD: FROM 9 TH TILL 11 TH JULY 2018 INCLUDED Linear annual depreciation of the principal This issuance is reserved for qualified investors under Moroccan Law as listed in the prospectus Financial Advisors Linear annual depreciation of the principal Agent in Charge of Centralization Registrar of the Operation Agents in Charge of the Placement Issuance of Conventional and Subordinate Bonds 1

2 APPROVAL OF THE AMMC (The Moroccan Financial Authority) In accordance with the AMMC circular, delivered in application of Section 14 of the Dahir No of September 21st 1993, as amended and extended, the original copy of the present prospectus has been approved by the AMMC on June 29 th, 2018 under reference VI/EM/014/2018. Issue of Conventional Bonds 2

3 PART I. PRESENTATION OF THE OPERATION Issue of Conventional Bonds 3

4 II. OBJECTIVES OF THE OPERATION The positive evolution of the credit activity of the FEC during the last years has logically been accompanied by an increase in both disbursement and financing needs, which required an increasing mobilization of resources. This increase should pursue over the coming years considering the development projects launched by the territorial agencies, mainly the Regions, on a national scale. In this context, the FEC's recourse to the bond market aims mainly at: Financing its activity; Reinforcing its own funds given the increase in its volume of activity; Diversifying the long-term funding sources and continuing the optimization of cost financing; Consolidating the FEC's image against the main partners and strengthening its position as a regular issuer of bonds on the market. III. CHARACTERISTICS OF THE OPERATION CONVENTIONAL BONDS Characteristics of the securities of Tranche A (Fixed-rate Conventional bonds with a maturity of 15 years non-listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Amount Maximum number of securities to be issued Nominal value per unit Subscription Price Maturity Subscription Period Non-listed bonds entirely dematerialized by subscription with the Central Depositary (MAROCLEAR) and entered into account at the authorized affiliates. Bearer bonds. 2,000,000,000 Dh. 20,000 bonds. 100,000 Dh Per value: 100% of the nominal value. 15 Years FROM JULY 9 TH 2018 TILL JULY 11 TH 2018 INCLUDED. Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate Risk premium Method of calculating interest Coupon payment Dutch auction without prioritization between tranches. Fixed rate (to be determined at the end of the subscription and communicated by Société Générale Maroc, the agent in charge of centralization). The nominal interest rate is determined by reference to the sovereign rate of equivalent maturity (15 years, repayable annually, fixed), observed from the benchmark yield curve of the secondary market of Treasury Bills as published by Bank Al Maghrib on June 19, 2018, a rate of 3.24% increased by a risk premium of between 60 and 90 basis points, a rate of between 3.84% and 4.14%. Bestween 60 and 90 basis points. Interest shall be calculated according to the following formula: [Remaining capital x Facial rate]. The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. Issue of Conventional Bonds 4

5 No deferral of the interests shall be possible in this operation. Tradability of the securities Principal Repayment Anticipated Repayment Assimilation clause Over-the-counter. The securities shall be freely negotiated without any restriction by the issuance conditions. The principal repayment of the loan's tranche A, purpose of this prospectus, will occur annually and linearly at each anniversary date of the issuance vesting date or the first working day following that date if it is a non-working day. The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche Abonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Bondholders Representation The bonds issued by the FEC and their interests constitute direct, general, unconditional and unsubordinated obligations of the issuer, ranking equally amongst themselves and the other present or future unsecured debts of the issuer. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, has appointed the firm Hdid Consultants as provisional agent of the Bondholders of tranches A, B and C of in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches A and C, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches A, B and C of the issue, which are grouped together under one single mass. Characteristics of the securities of Tranche B (reviewable-rate conventional bonds with a maturity of 10 years non-listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Maximum Amount Non-listed bonds entirely dematerialized by subscription with the Central Depositary (MAROCLEAR) and entered into account at the authorized affiliates. Bearer bonds. 2,000,000,000 Dh. Issue of Conventional Bonds 5

6 Maximum number of securities to be issued Nominal value per unit Subscription Price Maturity Subscription Period 20,000 bonds 100,000 Dh Per value: 100% of the nominal value. 10 Years FROM JULY 9 TH, 2018 TILL JULY 11 TH, 2018 INCLUDED. Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate Risk premium Interest Rate Fixing Date Method of calculating interest Coupon payment Tradability of the securities Principal Repayment Anticipated Repayment Assimilation clause Dutch auction without prioritization between tranches. Rate reviewable on an annual basis For the first year, the reference rate is determined on the basis of an arithmetic average composed of Interbank Average Weighted Interbank Rates, observed over a 6-month period ending on June 19, 2018 as published by Bank Al Maghrib, a rate of 2.27% increased by a risk premium of between 50 and 80 basis points, which is between 2.77% and 3.07%. For subsequent years, the Reference Rate is calculated on the basis of an arithmetic average of the Interbank Average Weighted Interbank Rates observed over a 6-month period preceding the coupon anniversary date of five business days, as published by Bank Al. Maghrib. Reference rates thus obtained shall be increased by a risk premium of between 50 and 80 basis points. Between 50 and 80 bps The interest rate is to be revised annually on the anniversary date. The new rate shall be communicated to investors by BMCI, the Domiciliary establishment before the anniversary date, by any means deemed useful ( , mail, etc.). Interests shall be calculated on monetary basis, i.e : [nominal amount x nominal rate x (Exact number of days /360)] The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. Over-the-counter. The securities shall be freely negotiated without any restriction by the issuance conditions. The tranche B of the bonds loan, purpose of this prospectus, will be repaid in fine. In case of merger, a spin-off or a partial transfer of assets from the FEC occurring during the loan period and resulting in the universal transfer of assets to a separate legal entity, the rights and obligations on the bonds will be automatically transferred to the substitute legal entity under the rights and obligations of the FEC. The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights Issue of Conventional Bonds 6

7 to tranche B bonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Bondholders Representation The bonds issued by the FEC and their interests constitute direct, general, unconditional and unsubordinated obligations of the issuer, ranking equally amongst themselves and the other present or future unsecured debts of the issuer. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated 20 April 2018, has appointed the firm Hdid Consultants as provisional agent of the Bondholders of tranches A, B and C in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches A and C, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches A, B and C of the issue, which are grouped together under one single mass. Characteristics of the securities of Tranche C (Annually-reviewable-rate conventional bonds with a maturity of 15 years non-listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Maximum Amount Maximum number of securities to be issued Nominal value per unit Subscription Price Maturity Subscription Period Non-listed bonds entirely dematerialized by subscription with the Central Depositary (MAROCLEAR) and entered into account at the authorized affiliates. Bearer bonds. 2,000,000,000 Dh. 20,000 bonds 100,000 Dh Per value: 100% of the nominal value. 15 Years Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate From July 9 th, 2018 Till July 11 th, 2018 included. Dutch auction without prioritization between tranches. Annually-Reviewable Rate For the first year, the reference rate is determined on the basis of an arithmetic average composed of Interbank Average Weighted Interbank Rates, observed over a 6-month period ending on June 19, 2018 as published by Bank Al Maghrib, a rate of 2.27% increased by a risk premium of between 60 and 90 basis points, which is between 2.87% and 3.17%. For subsequent years, the Reference Rate is calculated on the basis of an Issue of Conventional Bonds 7

8 arithmetic average of the Interbank Average Weighted Interbank Rates observed over a 6-month period preceding the coupon anniversary date of five business days, as published by Bank Al. Maghrib. Reference rates thus obtained shall be increased by a risk premium of between 60 and 90 basis points. Risk premium Interest Rate Fixing Date Method of calculating interest Coupon payment Tradability of the securities Principal Repayment Anticipated Repayment Assimilation clause Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Bondholders Representation Between 60 and 90 basis points. The interest rate is to be revised annually on the anniversary date. The new rate shall be communicated to investors by BMCI, the Domiciliary establishment before the anniversary date, by any means deemed useful ( , mail, etc.). Interests shall be calculated on monetary basis, i.e : [Remaining capital x nominal rate x (Exact number of days /360)] The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. Over-the-counter. The securities shall be freely negotiated without any restriction by the issuance conditions. The principal repayment of the loan's tranche C, purpose of this prospectus will occur annually and linearly at each anniversary date of the issuance vesting date or the first working day following that date if it is a non-working day. The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche C bonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. The bonds issued by the FEC and their interests constitute direct, general, unconditional and unsubordinated obligations of the issuer, ranking equally amongst themselves and the other present or future unsecured debts of the issuer. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated April 20, 2018, has appointed the firm Hdid Consultants as provisional agent for the Bondholders of the tranches A, B and C in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled Issue of Conventional Bonds 8

9 amortization for the tranches A and C, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches A, B and C of the issue, which are grouped together under one single mass. SUBORDINATED BONDS Disclaimer Subordinated bonds differ from classical bonds by reason of the contractually defined ranking of loans set forth in the subordination clause. The effect of the subordination clause is to make the repayment of the subordinated bond conditional on the repayment of all outstanding privileged or unsecured debts in the event of the issuer going into liquidation. Characteristics of the securities of Tranche D (Subordinated Fixed-rate conventional bonds with a maturity of 15 years non-listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Maximum Amount Maximum number of securities to be issued Nominal value per unit Subscription Price Maturity Subscription Period Non-listed subordinated bonds entirely dematerialized by subscription with the Central Depositary (MAROCLEAR) and entered into account at the authorized affiliates. Bearer bonds. 2,000,000,000 Dh. 20,000 bonds 100,000 Dh Per value: 100% of the nominal value. 15 Years FROM JULY 9 th, 2018 TILL JULY 11 th, 2018 INCLUDED. Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate Risk premium Method of calculating interest Coupon payment Tradability of the securities Principal Repayment Dutch auctionwithout prioritization between tranches. Fixed rate (to be determined at the end of the subscription and communicated by Société Générale Maroc, the agent in charge of centralization). The nominal interest rate is determined by reference to the sovereign rate of equivalent maturity (15 years, repayable annually, fixed), observed from the benchmark yield curve of the secondary market of Treasury Bills as published by Bank Al Maghrib on June 19, 2018, a rate of 3.24% increased by a risk premium of between 90 and 120 basis points, a rate of between 4.14% and 4.44%. Between 90 and 120 basis points Interest shall be calculated according to the following formula: [Remaining capital x Facial rate]. The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. Over-the-counter. The securities shall be freely negotiated without any restriction by the issuance conditions. The principal repayment of the loan's tranche D, purpose of this prospectus, will occur annually and linearly at each anniversary date of the issuance vesting date or the first working day following that date if it is a non-working Issue of Conventional Bonds 9

10 day. Anticipated Repayment Assimilation clause Loan Ranking Maintaining Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Bondholders Representation The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche D bonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. The capital and interest are subject to a subordination clause. The application of this clause in no way affects the legal rights regarding accounting principles for the assignment of losses, shareholders obligations, and the acquisition rights of the subscribers, according to the condition set in the contract for payment of securities in capital and interests. In the event of the liquidation of FEC, the reimbursement of capital and subordinated securities interests shall occur only after the interest relieving of privileged and/or unsecured creditors. These subordinated securities shall become reimbursable in the same ranking as all other subordinated loans that could be entered into by FEC in Morocco or internationally, in a proportion to the amount applicable. FEC agrees, until the actual reimbursement of the entire amount of securities of this loan, to institute on behalf of other subordinated loans that it might issue in the future, no priority in regards to the reimbursement rank in the event of liquidation, without granting the same rights to the subordinated securities of the present loan. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated April 20, 2018, has appointed the firm Hdid Consultants as provisional agent for the Bondholders of the tranches D, E, F, G, H and I in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches D, E, H and I, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches D, E, F, G, H and I of the issue, which are grouped together under one single mass. Characteristics of the securities of Tranche E (Fixed-rate Subordinated bonds with a maturity of 15 years listed on the Casablanca stock-exchange) Nature of securities Subordinated bonds listed on the Casablanca Stock Exchange, fully Issue of Conventional Bonds 10

11 dematerialized by registration in the Central Deposit institution (MAROCLEAR) and inscribed as accounts with authorized affiliates Legal Form Tranche Maximum Amount Maximum number of securities to be issued Nominal value per unit Maturity Subscription Period Bearer bonds. 2,000,000,000 Dh. 20,000 bonds 100,000 Dh 15 Years FROM JULY 9 th, 2018 TILL JULY 11 th, 2018 INCLUDED. Vesting date JULY 19 th, Maturity date JULY 19 th, Allocation Method Nominal interest rate Dutch auctionwithout prioritization between tranches. Fixed rate The nominal interest rate is determined by reference to the sovereign rate of equivalent maturity (15 years, repayable annually, fixed), observed from the benchmark yield curve of the secondary market of Treasury Bills as published by Bank Al Maghrib on June 19, 2018, a rate of 3.24% increased by a risk premium of 90 basis points, a rate of 4.14%. Risk premium Subscription price 90 bps Ranging between 98.10% and % included, which represents a spread between 90 and 120 bps. Expressed as a percentage of nominal value, with two decimals. The lower and upper price limits are calculated on the basis of the face rate and the range of risk premiums mentioned above. Corresponding to an actuarial rate between 4.14% and 4.44% included. The actuarial rate of return is the annual rate that, at a given date, equates at this rate and compound interest the present values of the amounts to be paid and the amounts receivable. This rate is significant only for a subscriber who would retain his obligations until their final repayment. In the case of this Transaction and taking into account the allocation method chosen, namely the Dutch auction, this rate will be determined according to the subscription price proposed by each investor. Method of calculating interest Coupon payment Tradability of the securities Quotation of Securities Interest shall be calculated according to the following formula: [Remaining capital x Facial rate]. The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. The Tranche E bonds are freely tradable on the Casablanca Stock Exchange. There is no restriction imposed by the conditions for issuance and free negotiability of the Tranche E securities. The subordinated bonds of tranche E will be listed on the Casablanca Stock Exchange and will thus be the subject of an application for admission to the bond compartment of the Casablanca Stock Exchange. Their quotation date is scheduled for July 16 th, 2018 on the bond compartment under Ticker OFECB. To be listed on the Casablanca Stock Exchange, the cumulative amounts allocated to tranches E, G and I must be greater than or equal to 20 million MAD. If at the end of the subscription period, the amount allocated to Trenches E, G, and I is less than 20 million MAD, subscriptions for this tranche will be Issue of Conventional Bonds 11

12 1st listing procedure Principal Repayment Anticipated Repayment Assimilation clause canceled. The listing of tranche E will be made by a direct listing in accordance with Articles and of the General Regulations of the Stock Exchange. The principal repayment of the loan's tranche E, purpose of this prospectus, will occur annually and linearly at each anniversary date of the issuance vesting date or the first working day following that date if it is a non-working day. The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds boughtback shall thus only be canceled upon consent of Bank Al-Maghrib. In the event of cancellation, the issuer must inform the Casablanca Stock Exchange of the canceled bonds. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche E bonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. Loan Ranking Maintaining Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Entity in charge of registering the transaction on Casablanca Stock Exchange Bondholders Representation The capital and interest are subject to a subordination clause. The application of this clause in no way affects the legal rights regarding accounting principles for the assignment of losses, shareholders obligations, and the acquisition rights of the subscribers, according to the condition set in the contract for payment of securities in capital and interests. In the event of the liquidation of FEC, the reimbursement of capital and subordinated securities interests shall occur only after the interest relieving of privileged and/or unsecured creditors. These subordinated securities shall become reimbursable in the same ranking as all other subordinated loans that could be entered into by FEC in Morocco or internationally, in a proportion to the amount applicable. FEC agrees, until the actual reimbursement of the entire amount of securities of this loan, to institute on behalf of other subordinated loans that it might issue in the future, no priority in regards to the reimbursement rank in the event of liquidation, without granting the same rights to the subordinated securities of the present loan. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat CFG Markets Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated 20 April 2018, has appointed the firm Hdid Consultants as provisional agent for the Bondholders of the tranches D, E, F, G, H and I in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager Issue of Conventional Bonds 12

13 undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches D, E, H and I, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches D, E, F, G, H, and I of the issue, which are grouped together under one single mass. Characteristics of the securities of Tranche F (Annually-reviewable-rate Subordinated bonds with a maturity of 10 years non-listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Maximum Amount Maximum number of securities to be issued Nominal value per unit Subscription Price Maturity Subscription Period Non-listed subordinated bonds entirely dematerialized by subscription with the Central Depositary (MAROCLEAR) and entered into account at the authorized affiliates. Bearer bonds. 2,000,000,000 Dh. 20,000 bonds 100,000 Dh Per value: 100% of the nominal value. 10 Years FROM July 9 th, 2018 TILL July 11 th, 2018 INCLUDED. Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate Risk premium Interest Rate Fixing Date Method of calculating interest Coupon payment Tradability of the securities Principal Repayment Dutch auctionwithout prioritization between tranches. Annually-Reviewable Rate For the first year, the reference rate is determined on the basis of an arithmetic average composed of Interbank Average Weighted Interbank Rates, observed over a 6-month period ending on June 19, 2018 as published by Bank Al Maghrib, a rate of 2.27% increased by a risk premium of between 70 and 100 basis points, which is between 2.97% and 3.27%. For subsequent years, the Reference Rate is calculated on the basis of an arithmetic average of the Interbank Average Weighted Interbank Rates observed over a 6-month period preceding the coupon anniversary date of five business days, as published by Bank Al. Maghrib. Reference rates thus obtained shall be increased by a risk premium of between 70 and 100 basis points. Between 70 and 100 basis points The interest rate is to be revised annually on the anniversary date. The new rate shall be communicated to investors by BMCI, the domiciliary establishment before the anniversary date, by any means deemed useful ( , mail, etc.). Interest shall be calculated according to the following formula: [nominal x Facial rate x (exact number of days /360)]. The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. Over-the-counter. The securities shall be freely negotiated without any restriction by the issuance conditions. The tranche F of the bonds loan, purpose of this prospectus, will be repaid in fine. Issue of Conventional Bonds 13

14 In case of merger, a spin-off or a partial transfer of assets from the FEC occurring during the loan period and resulting in the universal transfer of assets to a separate legal entity, the rights and obligations on the bonds will be automatically transferred to the substitute legal entity under the rights and obligations of the FEC. Anticipated Repayment Assimilation clause The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche F bonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. Loan Ranking Maintaining Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Bondholders Representation Capital and interest are subject to a subordination clause. The application of this clause in no way affects the legal rights regarding accounting principles for the assignment of losses, shareholders obligations, and the acquisition rights of the subscribers, according to the condition set in the contract for payment of securities in capital and interests. In the event of the liquidation of FEC, the reimbursement of capital and subordinated securities interests shall occur only after the interest relieving of privileged and/or unsecured creditors. These subordinated securities shall become reimbursable in the same ranking as all other subordinated loans that could be entered into by FEC in Morocco or internationally, in a proportion to the amount applicable. FEC agrees, until the actual reimbursement of the entire amount of securities of this loan, to institute on behalf of other subordinated loans that it might issue in the future, no priority in regards to the reimbursement rank in the event of liquidation, without granting the same rights to the subordinated securities of the present loan. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated 20 April 2018, has appointed the firm Hdid Consultants as provisional agent for the Bondholders of the tranches D, E, F, G, H and I in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches D, E, H and I, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches D, E, F, G, H, and I of the issue, which are grouped together under one single mass. Issue of Conventional Bonds 14

15 Characteristics of the securities of Tranche G (Annually-reviewable-rate subordinated bonds with a maturity of 10 years listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Maximum Amount Maximum number of securities to be issued Nominal value per unit Maturity Subscription Period Subordinated bonds listed on the Casablanca Stock Exchange, fully dematerialized by registration in the Central Deposit institution (MAROCLEAR) and inscribed as accounts with authorized affiliates. Bearer bonds. 2,000,000,000 Dh. 20,000 bonds 100,000 Dh 10 Years FROM July 9 th, 2018 TILL July 11 th, 2018 INCLUDED. Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate Interest Rate Fixing Date Risk premium Dutch auction without prioritization between tranches. Annually-Reviewable Rate For the first year, the reference rate is determined on the basis of an arithmetic average composed of Interbank Average Weighted Interbank Rates, observed over a 6-month period ending on June 19, 2018 as published by Bank Al Maghrib, a rate of 2.27% increased by a risk premium of 70 basis points, a rate of 2.97%. For subsequent years, the Reference Rate is calculated on the basis of an arithmetic average of the Interbank Average Weighted Interbank Rates observed over a 6-month period preceding the coupon anniversary date of five trading days, as published by Bank Al. Maghrib. The reference interest rate obtained will be increased by a spread equal to the difference between the reference rate for the first year and the weighted average actuarial rate from the results of the allocation and will be communicated to the Bondholders and the Casablanca Stock Exchange 4 trading days before the anniversary date. The interest rate will be revised annually on the anniversary dates of the date of the loan use on July 19 of each year. The new rate shall be communicated to investors by BMCI, the domiciliary establishment, before the anniversary date, by any means deemed useful ( , mail, etc.). The revised rate will be announced in the bulletin of the Casablanca Stock Exchange. 70 basis points for the first year Subscription price Between 99.71% and % included which represents spread between 70 and 100 bps. Expressed as a percentage of nominal value, with two decimals. The lower and upper price limits are calculated on the basis of the face rate and the range of risk premiums mentioned above. Corresponding to an actuarial rate between 2.97% and 3.27% included. The actuarial rate of return is the annual rate that, at a given date, equates at this rate and compound interest the present values of the amounts to be paid and the amounts receivable. This rate is significant only for a subscriber who would retain his obligations until their final repayment. In the case of this Transaction and taking into account the allocation method chosen, namely the Dutch auction, this rate will be determined according to the subscription price proposed by each investor. Issue of Conventional Bonds 15

16 Method of calculating interest Coupon payment Tradability of the securities Quotation of Securities 1st listing procedure Principal Repayment Anticipated Repayment Assimilation clause Interest shall be calculated according to the following formula: [nominal x Facial rate x (exact number of days / 360)]. The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. The tranche G bonds are freely tradable on the Casablanca Stock Exchange. There is no restriction imposed by the conditions for issuance and free negotiability of the Tranche G securities. The subordinated tranche G bonds will be listed on the Casablanca Stock Exchange and will thus be the subject of an application for admission to the bond compartment of the Casablanca Stock Exchange. Their quotation date is scheduled for July 16 th, 2018 on the bond compartment under Ticker OFECC. To be listed on the Casablanca Stock Exchange, the cumulative amounts allocated to tranches E, G and I must be greater than or equal to 20 million MAD. If at the end of the subscription period, the amount allocated to Trenches E, G, and I is less than 20 million MAD, subscriptions for this tranche will be canceled. The listing of tranche G shall be made by direct quotation in accordance with Articles and of the General Regulations of the Stock Exchange. The tranche G of the bonds loan, purpose of this prospectus, will be repaid in fine. In case of merger, a spin-off or a partial transfer of assets from the FEC occurring during the loan period and resulting in the universal transfer of assets to a separate legal entity, the rights and obligations on the bonds will be automatically transferred to the substitute legal entity under the rights and obligations of the FEC. The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. In the event of cancellation, the issuer must inform the Casablanca Stock Exchange of the canceled bonds. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche G bonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. Loan Ranking The capital and interest are subject to a subordination clause. The application of this clause in no way affects the legal rights regarding accounting principles for the assignment of losses, shareholders obligations, and the acquisition rights of the subscribers, according to the condition set in the contract for payment of securities in capital and interests. In the event of the liquidation of FEC, the reimbursement of capital and subordinated securities interests shall occur only after the interest relieving of privileged and/or unsecured creditors. These subordinated securities shall become reimbursable in the same ranking as all other subordinated loans that could be entered into by FEC in Morocco or internationally, in a proportion to the amount applicable. Issue of Conventional Bonds 16

17 Maintaining Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Entity in charge of registering the transaction on the Casablanca Stock Exchange Bondholders Representation FEC agrees, until the actual reimbursement of the entire amount of securities of this loan, to institute on behalf of other subordinated loans that it might issue in the future, no priority in regards to the reimbursement rank in the event of liquidation, without granting the same rights to the subordinated securities of the present loan. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat CFG Markets Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated 20 April 2018, has appointed the firm Hdid Consultants as provisional agent for the Bondholders of the tranches D, E, F, G, H and I in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches D, E, H and I, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches D, E, F, G, H, and I of the issue, which are grouped together under one single mass. Characteristics of the securities of Tranche H (Annually-reviewable-rate subordinated bonds with a maturity of 15 years non-listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Maximum Amount Maximum number of securities to be issued Nominal value per unit Subscription Price Maturity Subscription Period Non-listed subordinated bonds entirely dematerialized by subscription with the Central Depositary (MAROCLEAR) and entered into account at the authorized affiliates. Bearer bonds. 2,000,000,000 Dh. 20,000 bonds 100,000 Dh Per value: 100% of the nominal value. 15 Years FROM July 9 th, 2018 TILL July 11 th, 2018 INCLUDED. Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate Dutch auction without prioritization between tranches. Annually-Reviewable Rate For the first year, the reference rate is determined on the basis of an arithmetic average composed of Interbank Average Weighted Interbank Rates, observed over a 6-month period ending on June 19, 2018 as published by Bank Al Maghrib, a rate of 2.27% increased by a risk premium of between 90 and 120 basis points, which is between 3.17% and 3.47%. For subsequent years, the Reference Rate is calculated on the basis of an Issue of Conventional Bonds 17

18 arithmetic average of the Interbank Average Weighted Interbank Rates observed over a 6-month period preceding the coupon anniversary date of five business days, as published by Bank Al. Maghrib. Reference rates thus obtained shall be increased by a risk premium of between 90 and 120 basis points. Risk premium Interest Rate Fixing Date Method of calculating interest Coupon payment Tradability of the securities Principal Repayment Anticipated Repayment Assimilation clause Between 90 and 120 basis points The interest rate is to be revised annually on the anniversary date. The new rate shall be communicated to investors by BMCI, the domiciliary establishment before the anniversary date, by any means deemed useful ( , mail, etc.). Interest shall be calculated according to the following formula: [Remaining capital x Facial rate x (exact number of days / 360)]. The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. Over-the-counter. The securities shall be freely negotiated without any restriction by the issuance conditions. The principal repayment of the loan's tranche H, purpose of this prospectus, will occur annually and linearly at each anniversary date of the issuance vesting date or the first working day following that date if it is a non-working day. The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche H bonds, it will be authorized, without requesting the consent of the holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. Loan Ranking Maintaining Loan Ranking Guarantee Capital and interest are subject to a subordination clause. The application of this clause in no way affects the legal rights regarding accounting principles for the assignment of losses, shareholders obligations, and the acquisition rights of the subscribers, according to the condition set in the contract for payment of securities in capital and interests. In the event of the liquidation of FEC, the reimbursement of capital and subordinated securities interests shall occur only after the interest relieving of privileged and/or unsecured creditors. These subordinated securities shall become reimbursable in the same ranking as all other subordinated loans that could be entered into by FEC in Morocco or internationally, in a proportion to the amount applicable. FEC agrees, until the actual reimbursement of the entire amount of securities of this loan, to institute on behalf of other subordinated loans that it might issue in the future, no priority in regards to the reimbursement rank in the event of liquidation, without granting the same rights to the subordinated securities of the present loan. The bonds issued by the FEC are not subject to any guarantee. Issue of Conventional Bonds 18

19 Rating Applicable Law Competent Jurisdiction Bondholders Representation The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated 20 April 2018, has appointed the firm Hdid Consultants as provisional agent for the Bondholders of the tranches D, E, F, G, H and I in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches D, E, H and I, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches D, E, F, G, H, and I of the issue, which are grouped together under one single mass. Characteristics of the securities of Tranche I (Annually-reviewable-rate subordinated bonds with a maturity of 15 years listed on the Casablanca stock-exchange) Nature of securities Legal Form Tranche Maximum Amount Maximum number of securities to be issued Nominal value per unit Maturity Subscription Period Subordinated bonds listed on the Casablanca Stock Exchange, fully dematerialized by registration in the Central Deposit institution (MAROCLEAR) and inscribed as accounts with authorized affiliates. Bearer bonds. 2,000,000,000 Dh. 20,000 bonds 100,000 Dh 15 Years FROM July 9 th, 2018 TILL July 11 th, 2018 INCLUDED. Vesting date July 19 th, Maturity date July 19 th, Allocation Method Nominal interest rate Risk premium Subscription price Dutch auctionwithout prioritization between tranches. Annually-Reviewable Rate For the first year, the reference rate is determined on the basis of an arithmetic average composed of Interbank Average Weighted Interbank Rates, observed over a 6-month period ending on June 19, 2018 as published by Bank Al Maghrib, a rate of 2.27% increased by a risk premium of 90 basis points, a fixed rate of 3.17%. For subsequent years, the Reference Rate is calculated on the basis of an arithmetic average of the Interbank Average Weighted Interbank Rates observed over a 6-month period preceding the coupon anniversary date of five trading days, as published by Bank Al. Maghrib. The reference interest rate obtained will be increased by a spread equal to the difference between the reference rate for the first year and the weighted average actuarial rate from the results of the allocation and will be communicated to the Bondholders and the Casablanca Stock Exchange 4 trading days before the anniversary date. 90 basis points for the first year Between 99.71% and % included which represents a spread between Issue of Conventional Bonds 19

20 90 and 120 bps. Expressed as a percentage of face value, with two decimals. The lower and upper price limits are calculated on the basis of the nominal rate and the range of risk premiums mentioned above. Corresponding to an actuarial rate between 3.17% and 3.47% included. The actuarial rate of return is the annual rate that, at a given date, equates at this rate and compound interest the present values of the amounts to be paid and the amounts receivable. This rate is significant only for a subscriber who would retain his obligations until their final repayment. In the case of this Transaction and taking into account the allocation method chosen, namely the Dutch auction, this rate will be determined according to the subscription price proposed by each investor. Interest Rate Fixing Date Method of calculating interest Coupon payment Tradability of the securities Quotation of Securities 1st listing procedure Principal Repayment Anticipated Repayment Assimilation clause The interest rate is to be revised annually on the anniversary date. The new rate shall be communicated to investors by BMCI, the domiciliary establishment before the anniversary date, by any means deemed useful ( , mail, etc.). The revised rate will be announced in the bulletin of the Casablanca Stock Exchange. Interest shall be calculated according to the following formula: [Remaining capital x Facial rate x (exact number of days / 360)]. The coupons will be paid annually at each anniversary date of the vesting date, i.e July 19 th, 2018 of each year or on the first following working day in case that day is a non-working day. No deferral of the interests shall be possible in this operation. The tranche I bonds are freely tradable on the Casablanca Stock Exchange. There is no restriction imposed by the conditions for issuance and free negotiability of the Tranche I securities. The subordinated bonds of Tranche I will be listed on the Casablanca Stock Exchange and will thus be the subject of an application for admission to the bond compartment of the Casablanca Stock Exchange. Their quotation date is scheduled for July 16th, 2018 on the bond compartment under Ticker OFECD. To be listed on the Casablanca Stock Exchange, the cumulative amounts allocated to tranches E, G and I must be greater than or equal to 20 million MAD. If at the end of the subscription period, the amount allocated to Trenches E, G, and I is less than 20 million MAD, subscriptions for this tranche will be canceled. The listing of tranche I will be made by direct quotation in accordance with Articles and of the General Regulations of the Stock Exchange. The principal repayment of the loan's tranche I, purpose of this prospectus, will occur annually and linearly at each anniversary date of the issuance vesting date or the first working day following that date if it is a non-working day. The FEC may not proceed with the anticipated repayment of bonds, purpose of this issuance. However, the FEC keeps the right to proceed, with the Bank Al-Maghrib prior consent, to bonds buy-back on the secondary market, provided the legal and regulatory provisions don't oppose to it, as these buy-backs are without consequence to a subscriber willing to keep his securities until normal expiry date and without effect on the normal amortization schedule. The bonds bought-back shall thus only be canceled upon consent of Bank Al-Maghrib. In the event of cancellation, the issuer must inform the Casablanca Stock Exchange of the canceled bonds. The bonds issued by the FEC cannot be assimilated to any anterior securities issuance. In case the FEC subsequently issues new bonds with completely similar rights to tranche I bonds, it will be authorized, without requesting the consent of the Issue of Conventional Bonds 20

21 holders of former bonds, to proceed to the assimilation of the whole securities successively issued, thus unifying the operations of their financial service and their negotiation. Loan Ranking Maintaining Loan Ranking Guarantee Rating Applicable Law Competent Jurisdiction Entity in charge of registering the transaction on the Casablanca Stock Exchange Bondholders Representation The capital and interest are subject to a subordination clause. The application of this clause in no way affects the legal rights regarding accounting principles for the assignment of losses, shareholders obligations, and the acquisition rights of the subscribers, according to the condition set in the contract for payment of securities in capital and interests. In the event of the liquidation of FEC, the reimbursement of capital and subordinated securities interests shall occur only after the interest relieving of privileged and/or unsecured creditors. These subordinated securities shall become reimbursable in the same ranking as all other subordinated loans that could be entered into by FEC in Morocco or internationally, in a proportion to the amount applicable. FEC agrees, until the actual reimbursement of the entire amount of securities of this loan, to institute on behalf of other subordinated loans that it might issue in the future, no priority in regards to the reimbursement rank in the event of liquidation, without granting the same rights to the subordinated securities of the present loan. The bonds issued by the FEC are not subject to any guarantee. The bonds issued by the FEC have not been rated. Moroccan Law Commercial Court of Rabat CFG Markets Pending the General Meeting of the Bondholders, the FEC Chief Executive Officer, by virtue of the powers granted to him by the Board of Directors, which was held on May 27, 2016, and the decision of the Minister of the Interior dated 20 April 2018, has appointed the firm Hdid Consultants as provisional agent for the Bondholders of the tranches D, E, F, G, H and I in accordance with the relevant legal provisions. This decision will take effect as of the opening of the subscription period and will expire at the end of the election of the definitive agents by the General Meeting of the Bondholders. The General Manager undertakes that the General Meeting of the Bondholders be convened by the provisional representative no later than 30 days before the first scheduled amortization for the tranches D, E, H and I, and this, in order to appoint the permanent representative. It being specified that the appointed temporary proxy is the same person for tranches D, E, F, G, H, and I of the issue, which are grouped together under one single mass. Issue of Conventional Bonds 21

22 IV. TIMETABLE FOR THE OPERATION No. Stages Date 1 Reception by the Casablanca Stock Exchange of the operation s complete file June 22, Issuance by the Casablanca Stock Exchange of the notice of approval June 29, Procurement of AMMC visa June 29, Reception by the Casablanca Stock Exchange of the information note approved by the AMMC June 29, Publication of notice of the operation in the Quotation Report July 2, Publication of an excerpt of the background note in a legal announcement publication July 3, Opening of the subscription period July 9, Closure of the subscription period July 11, Centralization of subscription orders by Société générale Maroc, the Agent in charge of Centralization July 11, Receipt by Casablanca Stock Exchange of the results of the bond issue and the withheld rate July 12, Admission of the bonds Recording of the stock exchange transaction Announcement of the results of the operation in the Quotation Report July 16, Payment / Delivery July 19, Publication of the results of the Transaction and the rates retained in a legal publication newspaper by the Issuer July 23, 2018 V. INVESTMENT SYNDICATE AND FINANCIAL AGENTS Type of Financial Agents Name Address Financial Advisors Société Générale Maroc CFG Bank Corporate Finance 55 boulevard Abdelmoumen Casablanca 5-7 rue Ibnou Toufail - Casablanca Agent in Charge of Centralization Société Générale Maroc 5-7 rue Ibnou Toufail - Casablanca Agents in Charge of the Placement Domiciliary establishment ensuring the financial service of the issuer Société Générale Maroc CFG Bank BMCI 55 boulevard Abdelmoumen Casablanca 5-7 rue Ibnou Toufail - Casablanca 26, Place des Nations Unies Casablanca Registrar of the Operation CFG Markets 5-7 rue Ibnou Toufail - Casablanca Issue of Conventional Bonds 22

23 PART II. FEC PRESENTATION Issue of Conventional Bonds 23

24 I. GENERAL INFORMATION Corporate name Head office FONDS D EQUIPEMENT COMMUNAL (FEC) Telephone through 93 Fax Website EspaceOudayas. Angle avenue Annakhil et avenue Ben Barka, B.P Hay Riad, Rabat fec@fec.ma Creation date June 13, 1959 Finacial year Company object (articles 3 and 3 bis of Law No promulgated by Dahir No of Safar 5, 1413 (August 5, 1992) reorganizing the Communal Equipment Fund, as modified and supplemented by Law 11-96) Share capital on May 31, 2018 Capital Allocation Competent Courts Consultation place of legal documents Legal texts applicable to the society From 1 January to 31 December The Fondsd Equipement Communal is in charge ofcontributing to the development of local communities; to this end, it can: grant to local authorities, their associations as well as local public institutions any and all technical or financial assistance, including in the form of loans or advances for financing studies and equipment works; assist local communities in the identification, evaluation and the monitoring of their projects implementation; provide assistance in any form whatsoever to the State or a public body for the study and implementation of all plans and local development programs. The Fondsd Equipement Communal can also allocate between all local authorities anyamount, the management of which would be entrusted to it to that effect. It can also make any civil or commercial securitiesor real-estate transactions, related to its purpose, required to enable it to exercise the activities mentioned above. To implement the tasks assigned to it, the Fondsd Equipement Communal is authorized to perform all operations that the banks are entitled to practice under DahirNO of 15 Muharram 1414 (6th July, 1993) Relating to the exercise of the activity of credit institutions and to the control thereof, which has been repealed and replaced by Law No on credit institutions and similar bodies, promulgated by Dahir No of December 24, ,000,000,000 Dh Capital owned 100% by the State Rabat Courts The legal documents can be consulted at the head office of the FEC Public institution governed by: Law No , promulgated by DahirNo of 05 safar, 1413 (05 August 1992) carrying the reorganizing the Fondsd'EquipementCommunalAs amended and supplemented by Law 11-96; Decree of the Minister of Finance, Trade, Industry and Craftsmanship No of 24 joumada II 1418 (27 October 1997) approving the operations of the Funds as a bank institution; The decree No of 19 Joumada II, 1413 (December 14th, 1992) adopted for the application of law No mentioned above; Law No relative to the appointment of higher management roles in applicationon of provisions of Articles 49 and 92 of the Constitution, promulgated by DahirNo of 27 chaabane 1433 (17 July 2012) as amended and supplemented. Due to its activity, the FEC is governed by Law No relative to credit institutions and assimilated bodies, promulgated by DahirNo of Issue of Conventional Bonds 24

25 December 24th, Making public offering, the FEC is submitted to the legal and statutory requirements relative to financial markets, especially: dahir n of March 13, 2013 promulgating law No relating to the Moroccan Capital Market Authority; Dahir providing law No of September 21st, 1993 concerning the Casablanca stock exchange modified and completed by the laws 34-96, 29-00, 52-01,45-06 and 43-09; General regulation of the stock exchange approved by the order of Minister of Economy and Finances No of July 7th, 2008, amended and completed by order of the Minister of Economy and Finance No of April 7, 2010, modified and completed by the order of Minister of Economy and Finances No of January 06th, 2014; Tax System Law No on the public offering and the information required of legal entities and organizations making public offerings, promulgated by Dahir No of 28 December 2012; Dahir providing law No of September 21st, 1993 as amended and completed by the laws No , and 44-06; Dahir No of January 9th, 1997 carrying promulgation of the law No relative to the creation of a central depositary and to the institution of a general regime for the inscription in account of certain values, modified and completed by the law No ; General regulation of the central Depositary approved by the order of Minister of Economy and Finances No of April 16th, 1998 and amended by the order of Minister of Economy, Finances, Privatization and Tourism No of October 30th, 2001 and by the order No of March 17th, 2005; General regulation of the AMMC such as approved by the order of Minister of Economy and Finances No. 2169/16 of the 14th of July 2016; Bank Al Maghrib's circular No. 2/G/96 of January 30th, 1996 relative to certificates of deposit and its modification; The AMMC circular as completed and amended; Dahir of January 26th, 1995 on promulgation of the law No relative to certain Negotiable debt securities as amended and completed by Laws No and TheFondsd'Equipement Communal, like the other banking institutions, is subject to Corporate Income Tax at a rate of 37% and to the VAT applicable to banking operations at a rate of 10%. II. INFORMATION ON THE FEC SHARE CAPITAL On the eve of this Operation, the share capital of the FEC is entirely owned by the State and amounts to MAD 1,000,000,000. Issue of Conventional Bonds 25

26 III. ACTIVITY With an experience of half a century in the financing of the local public sector, the FEC has developed an expertise and capitalized on know-how, which consolidate its role as a technical and financial partner for the Local Authorities and the holders of local investment projects. As a bank, the FEC seeks to control risks and to look for a level of profitability that makes the activity sustainable and more secure. As an institution with a mission of collective utility, the FEC is engaged in strengthening the local expertise and in promoting the investments which bring development. These two missions together confer to the FEC the strength of its positioning as a bank dedicated to the financing of the local public sector. The Bank offers to its customers products and services adapted to their needs and focuses on assisting them technically for building up and deploying their equipment projects. The FEC accompanies thus its customers in expressing their investment choices and offers them the possibility to realize high value-add projects. These projects aim at improving the Citizen's quality of life and cover areas such as urban mobility, connectivity of rural areas, development of areas with an economic activity, development of sports and leisure facilities, rural electrification, sanitation and access to safe drinking water, public lighting, establishment of green areas, cleanliness and environmental protection, improvement of touristic facilities, upgrade of schools, cultural and artistic animation, development of commercial infrastructures, integration of information technologies and promotion of clean technologies. IV.1. LOAN ACTIVITIES As part of its activity, the FEC offers: conventional loans to finance investment projects; Lines of credit (LOCs), in place since 2004, for the financing of development programs. This type of financing allows Local Authorities to have the visibility needed to secure funding for their development projects. It encourages Local Authorities to plan their investment programs in the medium and long term and enables them, thanks to its flexibility, to optimize the financing of the different components of the program. Issue of Conventional Bonds 26

27 IV.2. EVOLUTION OF THE GROSS OUTSTANDING (IN MMAD) 1 TCAM : + 8,5 % Source: FEC IV.3. EVOLUTION OF THE GROSS OUTSTANDING BY TYPE OF BORROWER (IN MMAD) % % 3% 4% 5% 4% 9% 13% 18% 83% 79% 67% Conseils Communaux Conseils Provinciaux et Préfectoraux Conseils Régionaux Groupement de Communes Source: FEC *Conseils communaux: CommunesCouncils *ConseilsProvinciaux et Préfectoraux: Provincial & prefectural councils *ConseilsRégionaux: Regional councils *Groupement de communes: Communes Groupement 1 The gross outstanding is the due capital (disbursed amount minus capital amortization). Issue of Conventional Bonds 27

28 IV. ADMINISTRATIVE BODIES On May 31st, 2018, the Board of directors is constituted as follows: Source: FEC Issue of Conventional Bonds 28