Securitisation versus Direct Sale: Two Routes into Moroccan NPL Investment

Acquisition of non-performing loan portfolios in Morocco can follow two principal routes: a direct sale to a single buyer, or securitisation through a collective vehicle such as an FPCT. Each route differs in structure, cost, flexibility and risk profile. This comparative note helps institutional investors decide which format fits a given transaction.

Principles and mechanics

Direct sale

Direct sale is the simpler acquisition mode. The originator transfers a portfolio to a single buyer (investor, specialised servicer or investment vehicle) under an assignment contract.

Main characteristics:

• Bilateral transaction between seller and buyer
• Full risk transfer to the acquirer
• No capital-markets regulator intervening in the structure
• Flexible contractual terms
• Typically shorter execution timelines (about 2–4 months)

Securitisation via FPCT

Securitisation involves creating a Fonds de Placements Collectifs en Titrisation (FPCT) that acquires the claims and issues units subscribed by investors. The vehicle requires AMMC authorisation.

Main characteristics:

• Collective structure open to multiple investors
• Regulatory supervision by the AMMC
• Tranching possible (senior / mezzanine / equity)
• Standardised transparency and reporting
• Longer set-up timelines (about 6–12 months)

Detailed comparison

Structuring costs

Direct sale. Costs are largely legal (contract drafting, due diligence), debtor notification and any financial advisory fees. For a mid-sized portfolio these often fall in the range of 0.5% to 1.5% of acquisition value.

Securitisation. Costs are materially higher and typically include:

• Legal and financial structuring advice
• FPCT management company
• Depositary
• Statutory auditor
• AMMC authorisation fees
• Rating agency (where used)

For an NPL FPCT, set-up costs commonly range from about 2% to 4% of securitised notional, plus ongoing management fees of roughly 0.3% to 0.8% per year.

Critical size and scale

Direct sale. No regulatory minimum size. Transactions of a few million MAD are common and accessible to a wide range of buyers.

Securitisation. High fixed costs imply a critical mass. Practitioners often treat an NPL FPCT as economically viable from roughly MAD 200–300 million of securitised claims. Below that, amortisation of structuring costs weighs heavily on returns.

Contractual flexibility

Direct sale. Parties have wide latitude to tailor terms:

• Fixed or variable price (including earn-out)
• Seller warranties (existence and conformity of claims)
• Retention or transfer of servicing
• Upside-sharing clauses
• Recovery-linked earn-outs

Securitisation. The regulatory framework imposes structural constraints:

• Standardised management regulations
• Defined reporting duties
• Formal governance (unit-holder meetings)
• Formal procedures to amend terms

That rigidity protects investors but limits adaptation to idiosyncratic circumstances.

Access to investors

Direct sale. The buyer must have the financial capacity to absorb the whole portfolio. That restricts the market to parties with significant equity or dedicated credit lines.

Securitisation. Tranching segments risk and can attract different investor types:

• Conservative institutions on senior tranches
• Specialised funds on mezzanine
• Risk capital or the originator on equity

That multiplication of funding sources helps close larger transactions.

Transparency and governance

Direct sale. Information is contractual. The buyer defines its own monitoring and reporting. Without a market regulator in the structure, discipline depends on internal practice.

Securitisation. The AMMC framework typically requires:

• Visa of the information memorandum
• Quarterly and annual reporting
• Certified accounts
• Disclosure of material events

That transparency supports investors subject to fiduciary constraints (insurers, pension funds).

Liquidity and exit

Direct sale. Exit is usually by selling the remaining portfolio to a third party. Morocco's secondary market for NPL portfolios remains thin; exit timing and terms are uncertain.

Securitisation. FPCT units can in theory trade on a secondary market or over the counter. In practice liquidity for NPL FPCTs remains limited, but unit standardisation can ease transfer.

Moroccan market context

Morocco's non-performing loan stock reaches MAD 102.3 billion according to Bank Al-Maghrib (2025), with ratios of 8.3% (banks) and 8.8% (finance companies). Provision coverage of 68% indicates provisioning maturity that can facilitate price negotiation.

To date, direct sales dominate. NPL securitisations remain relatively rare, constrained by:

• Structuring complexity
• A limited number of experienced management companies
• Originator preference for fast, discreet transactions

Draft Law 02-26 on recovery of claims, currently under review and not promulgated, could, if enacted, change some parameters of the analysis (notably contentious recovery timelines). It is not the current transfer regime.

Choice criteria for the investor

Prefer direct sale when:

• The target portfolio is modest in size (< MAD 200 million)
• The investor can fund the full acquisition
• Speed of execution is priority
• Maximum contractual flexibility is required
• The investor has its own servicing capacity
• Discretion of the transaction is valued

Prefer securitisation when:

• The portfolio is large (> MAD 300 million)
• The investor wants to attract co-investors
• Tranching optimises the cost of funding
• Regulated transparency is valued by stakeholders
• The investor targets institutional unit-holders
• The originator wants formal deconsolidation

Hybrid approaches

Intermediate structures can combine features of both formats:

Buy then contribute. The investor acquires the portfolio directly, then contributes it into a fund (not necessarily an FPCT) for later syndication.

Structured club deal. Several investors acquire jointly under a shareholders' agreement governing governance and cash-flow sharing.

Dedicated SPV. A special-purpose company holds the acquisition, offering bespoke structuring without full FPCT constraints.

Operational implications

Servicing

Direct sale. The buyer chooses its servicing model (in-house, external, or delegated to the originator). Agreements can be negotiated to suit.

Securitisation. Servicing must be formalised in an agreement annexed to the management regulations. Changes require formal procedures. The AMMC may require specific servicer commitments.

Accounting and tax

Direct sale. The buyer books claims at acquisition cost and recognises yield over time. Tax treatment generally follows the ordinary regime for recovery activity.

Securitisation. The FPCT benefits from tax neutrality; taxation applies at unit-holder level according to status. Accounting for units depends on classification. Specific treatment depends on facts and applicable law.

Due diligence

Direct sale. Diligence is run by the buyer to its own standards. Depth depends on resources and risk appetite.

Securitisation. The AMMC expects documented diligence in the information memorandum. Institutional investors may require additional audits. Responsibility of intermediaries (management company, advisers) is engaged.

Outlook

Market development could shift the balance between formats:

Factors favouring securitisation:

• Entry of international institutional investors seeking standardised formats
• Deepening management-company expertise
• Development of a secondary market in units
• Regulatory evolution that eases structuring

Factors favouring direct sale:

• Bank preference for discretion and speed
• Flexibility in a still-forming market
• Still-high FPCT structuring costs
• Limited specialised investor base

Conclusion

The choice between direct sale and securitisation is a multi-criteria decision: portfolio size, investor constraints, originator objectives and market conditions. In today's Moroccan market, direct sale retains a justified predominance because of flexibility and accessibility. Securitisation is a relevant alternative for large transactions that need syndication or a diversified institutional investor base.

For deeper treatment of each format, see AMMC supervision of NPL FPCTs and the NPL data-room checklist. The Law 33-06 vehicle is covered in FPCT structures for Moroccan NPL transfers.

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Sources

• Law 33-06 on securitisation of receivables, as amended
• AMMC circulars relating to FPCTs
• Bank Al-Maghrib, Annual Report on Banking Supervision, 2025
• Draft Law 02-26 on recovery of claims (under review, not promulgated)
• Serenor Capital market notes