Morocco NPL Glossary: Essential Terms for Investors

This glossary provides definitions of key terms used in Moroccan NPL transactions, combining regulatory terminology, legal concepts, transaction vocabulary, and market conventions. Understanding these terms is essential for navigating the Moroccan distressed credit market.

Regulatory and Classification Terms

Créance en souffrance

Non-performing loan (NPL). The Bank Al-Maghrib regulatory category for impaired credit exposures requiring classification and provisioning. Comprises three sub-categories: pré-douteuse, douteuse, and compromise.

Pré-douteuse

Substandard classification. First tier of NPL status for loans with payments overdue 90-180 days or presenting early warning indicators. Minimum provisioning requirement of 20%.

Douteuse

Doubtful classification. Second tier for loans with payments overdue 180-360 days or where recovery is considered uncertain. Minimum provisioning requirement of 50%.

Compromise

Loss classification. Final tier for loans with payments overdue beyond 360 days or where recovery is judged highly improbable. Full provisioning (100%) required.

Taux de couverture

Coverage ratio. The ratio of provisions to gross NPL exposure. As of 2024, the Moroccan banking sector reported 68% coverage, meaning banks have provisioned MAD 68 for every MAD 100 of non-performing loans.

Ratio NPL

NPL ratio. Non-performing loans as a percentage of total loans. Morocco reported 8.3% gross NPL ratio and 8.8% net NPL ratio in 2024. The net ratio adjusts for provisioning.

Bank Al-Maghrib

Morocco's central bank and banking supervisor. Issues regulations on loan classification, provisioning, and banking operations.

Circulaire 19/G/2002

The Bank Al-Maghrib circular establishing loan classification criteria and provisioning requirements for Moroccan banks.

Legal and Security Terms

Hypothèque

Mortgage. A real estate security interest registered with the Conservation Foncière. Provides the creditor with priority rights over the property and the ability to force sale through judicial procedures.

Conservation Foncière

Land Registry. The government agency maintaining property ownership records and registering security interests including mortgages.

Titre foncier

Land title certificate. The official document evidencing property ownership under the land registration system.

Nantissement

Pledge. A security interest over movable property or intangible assets. Common forms include nantissement de fonds de commerce (business asset pledge) and nantissement de titres (securities pledge).

Nantissement de fonds de commerce

Business asset pledge. Security interest covering a commercial establishment including equipment, inventory, clientele, lease rights, and other business assets.

Cautionnement

Guarantee or surety. A personal obligation by which a third party (caution) agrees to pay the creditor if the primary debtor defaults.

Cautionnement solidaire

Joint and several guarantee. A guarantee where the guarantor waives the benefits of discussion and division, allowing the creditor to pursue the guarantor directly without first exhausting remedies against the primary debtor.

Caution

Guarantor. The person or entity providing a guarantee (cautionnement).

Sûreté réelle

Real security. Security interest attached to specific property (real estate or movables) rather than a general personal obligation.

Sûreté personnelle

Personal security. An undertaking by a person (the guarantor) to pay if the primary debtor defaults, without attachment to specific property.

Gage

Chattel mortgage or pledge over movable property, such as vehicles or equipment.

Enforcement and Collection Terms

Saisie immobilière

Mortgage foreclosure. The judicial procedure for seizing and selling mortgaged real property to satisfy the creditor's claim.

Titre exécutoire

Enforceable title or judgment. A court order or other document that authorizes forced execution against the debtor's assets.

Injonction de payer

Payment order procedure. A simplified judicial procedure for collecting undisputed debts, resulting in an order to pay that becomes enforceable if not contested.

Saisie-attribution

Attachment order. A procedure to seize funds held by third parties (typically bank accounts) to satisfy a creditor's judgment.

Vente aux enchères

Public auction. The sale of seized property through a court-supervised bidding process.

Adjudication

Auction award. The act of awarding property to the highest bidder at a judicial auction.

Recouvrement amiable

Amicable collection. Recovery efforts through negotiation and voluntary payment rather than judicial proceedings.

Recouvrement judiciaire

Judicial collection. Recovery through court proceedings and forced execution.

Prescription

Statute of limitations. The legal time limit within which a creditor must bring claims or lose the right to enforce them.

Transaction Terms

Cession de créances

Assignment of receivables. The transfer of loan claims from the originating bank (cedant) to the acquiring investor (cessionnaire).

Cédant

Assignor/seller. The bank or other creditor transferring loans in an NPL transaction.

Cessionnaire

Assignee/buyer. The investor acquiring loans in an NPL transaction.

Loan tape

A structured data file containing key information about each loan in a portfolio, including borrower details, outstanding balances, collateral information, and collection history.

Data room

A secure physical or virtual space where the seller provides documentation for buyer due diligence.

Due diligence

The investigation process conducted by prospective buyers to verify portfolio information and assess risks before acquisition.

Face value

The nominal amount of outstanding debt, including principal and accrued interest. Also called valeur nominale or encours.

Prix de cession

Sale price. The amount paid by the buyer to acquire the NPL portfolio, typically expressed as a percentage of face value.

Décote (haircut)

Discount. The difference between face value and sale price, expressed as a percentage.

Going concern

A business operating normally, as opposed to being in liquidation. Relevant for corporate NPL analysis.

Structuring Terms

FPCT (Fonds de Placements Collectifs en Titrisation)

Securitization fund. The Moroccan vehicle for asset securitization under Law 33-06, used for NPL transactions involving issuance of securities backed by loan receivables.

Loi 33-06

Law 33-06 on securitization. The legal framework governing FPCT structures in Morocco.

Parts senior

Senior notes/units. Securities in a securitization structure with priority claim on cash flows and principal repayment.

Parts junior

Junior/subordinated notes. Securities with lower priority, absorbing first losses but offering higher potential returns.

Établissement gestionnaire

Management company. The entity responsible for administering an FPCT.

Établissement dépositaire

Custodian. The entity holding assets on behalf of an FPCT.

Servicer

Loan servicer. The entity responsible for managing and collecting loans on behalf of the portfolio owner.

Servicing agreement

The contract governing the servicer's responsibilities, performance standards, fees, and reporting obligations.

Valuation Terms

Valeur de recouvrement

Recovery value. The estimated amount that can be collected from a loan through the recovery process, after accounting for time and costs.

Taux de recouvrement

Recovery rate. Actual or expected collections as a percentage of outstanding loan balance.

Taux d'actualisation

Discount rate. The rate used to calculate present value of future cash flows in NPL valuation.

Valeur actualisée nette (VAN)

Net present value (NPV). The present value of expected future cash flows minus the acquisition cost.

TRI (Taux de Rendement Interne)

Internal rate of return (IRR). The discount rate at which the NPV of investment cash flows equals zero.

Stress test

Scenario analysis testing portfolio performance under adverse assumptions.

Sensibilité

Sensitivity analysis. Testing how valuation changes with variations in key assumptions.

Procedural Terms

Livre V (Code de Commerce)

Book V of the Commercial Code. The provisions governing business difficulties and insolvency proceedings, including judicial reorganization (redressement judiciaire) and liquidation (liquidation judiciaire).

Redressement judiciaire

Judicial reorganization. Court-supervised restructuring of a business in financial difficulty.

Liquidation judiciaire

Judicial liquidation. Court-supervised winding up and asset distribution for insolvent businesses.

Syndic

Insolvency administrator. The court-appointed official managing insolvency proceedings.

Déclaration de créances

Claim filing. The formal submission of a creditor's claim in insolvency proceedings.

Plan de continuation

Continuation plan. A reorganization plan allowing a business to continue operations while repaying creditors.

Market Terms

Marché secondaire

Secondary market. The market for trading existing NPL portfolios, as opposed to the primary market where loans are originated.

Loi 02-26 (Projet)

Draft Law 02-26. Proposed legislation to establish a dedicated framework for secondary market NPL transactions in Morocco. Not yet promulgated.

NPL vintage

The period when loans became non-performing. Older vintages typically have lower recovery rates.

Portefeuille granulaire

Granular portfolio. A portfolio with many small exposures rather than concentrated large loans.

REO (Real Estate Owned)

Properties acquired by creditors through foreclosure or dation en paiement.

Dation en paiement

Payment in kind. Transfer of property to a creditor in satisfaction of debt.

Accord transactionnel

Settlement agreement. A negotiated resolution where the debtor pays less than full amount owed in exchange for release from the remaining obligation.

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This glossary covers essential terminology for NPL transactions in Morocco. Investors should supplement this reference with specific legal and regulatory guidance for their transactions.

Sources

• Bank Al-Maghrib regulatory publications
• Moroccan legal codes (Civil Code, Commercial Code, Code of Civil Procedure)
• Law 33-06 on securitization
• Market practice in Moroccan NPL transactions