Bank of Africa : Résumé de la Note d Opération (version anglaise)

Summary prospectus

BANK OF AFRICA

Perpetual subordinated debt issue of up to MAD 500,000,000 with a loss

absorption and coupon payment cancellation provision

The prospectus approved by the AMMC comprises:

• The offer document
• BANK OF AFRICA's reference document for the 2022 financial year, registered by the AMMC 16 June 2023, reference number EN/EM/009/2023.

Tranche A

(adjustable every 5 years - unlisted)

Tranche B

(adjustable annually - unlisted)

	Maximum size		MAD 500,000,000
	Maximum number of		5,000 perpetual subordinated notes
	securities
	Nominal value		MAD 100,000
	Securities' tradability		Over-the-counter (not traded on the Casablanca Stock Exchange)
			Adjustable every 5 years	Adjustable annually
			For an initial 5-year period, the nominal interest
				For the first year, the nominal interest rate will be
			rate will be based on the 5-year rate, in turn
	Nominal interest rate		based on the 5-year benchmark yield	based on the full 52-week rate, in turn based on
		for
				the benchmark yield for Treasury bonds traded on
			Treasury bonds traded on the secondary market
				the secondary market as published by Bank Al-
			as published by Bank Al-Maghrib 21 June 2023,
			plus a risk premium	Maghrib 21 June 2023, plus a risk premium
	Risk premium		Between 220 and 230 basis points	Between 210 and 220 basis points
	Repayment guarantee		No specific guarantee is provided in respect of this issue
			Perpetual, with the possibility of early repayment from the 5th anniversary of the cum-coupon date,
	Maturity		and only at the issuer's request, on condition that notice of at least five years is given and with Bank
			Al-Maghrib's prior approval

French auction method with priority given to Tranche A (floating rate adjustable every 5 years) and

Allotment method

then Tranche B (rate adjustable annually)

Subscription period: 22-26 June 2023 inclusive

Only those qualified Moroccan investors listed in this offer document may subscribe for these notes and trade them on the

secondary market

Advisory institution

Book-runner

MOROCCAN CAPITAL MARKETS AUTHORITY'S VISA

In accordance with the provisions of the AMMC circular published in application of Article 5 of Act No. 44-12 relating to public offerings and information required of legal entities and organisations making a public offering, this prospectus has been approved by the AMMC 16 June 2023, reference number VI/EM/019/2023.

This offer document forms only part of the prospectus approved by the AMMC. The latter comprises the following documents:

• This offer document
• BANK OF AFRICA's reference document for the 2022 financial year, registered by the AMMC 16 June 2023, reference number EN/EM/009/2023

Perpetual subordinated debt issue - Summary prospectus

WARNING

The prospectus approved by the Moroccan Capital Markets Authority (AMMC) comprises the following documents.

• The offer document
• BANK OF AFRICA's reference document for the 2022 financial year, registered by the AMMC 16 June 2023, with reference number EN/EM/009/2023.

Potential investors are asked to read the information contained in each of the aforementioned documents prior to making their decision on whether to participate in the transaction referred to in this offer document.

The visa of the Moroccan Capital Markets Authority (AMMC) does not imply that it approves the opportunity presented by this transaction nor that it authenticates the information presented. The visa has been granted following a review to ensure that the information given to investors in respect of the proposed transaction is relevant and consistent.

The attention of potential investors is drawn to the fact that investing in financial instruments incurs risk.

The AMMC does not comment on whether the proposed transaction is appropriate or provide qualitative judgement of the issuer's position. Neither does the AMMC visa offer any safeguard against the risks associated with the issuer or the securities offered in the context of the transaction referred to in this prospectus.

Investors must therefore ensure, prior to subscribing, that they have a good understanding of the nature and characteristics of the securities offered and that they are able to manage their exposure to the risks inherent in the said securities.

Investors are therefore asked to:

• Carefully read each of the documents and the information provided, especially that provided in this offer document's Risk Factors section as well as in the aforementioned registration document.
• Consult, if necessary, any professional who is competent in matters of investment in financial instruments.

The aforementioned prospectus is not intended for persons who are not legally authorised to participate in the proposed transaction due to their place of residence. Persons who may happen to have a copy of the said prospectus in their possession are invited to make the necessary enquiries to ensure that they comply with the regulations which govern their participating in this type of transaction. The financial instruments referred to in the aforementioned prospectus will only be offered by the transaction's bookrunner in strict accordance with the current laws and regulations in those countries in which the latter will make such an offer.

Neither the Moroccan Capital Markets Authority (AMMC) nor BMCE Capital Conseil shall be liable in the event that the book-runner fails to comply with such laws or regulations.

A perpetual subordinated note differs from a classic bond in terms of the rank of claims contractually defined by the subordination clause as well as it not having any maturity date.

The effect of the subordination clause is, in the event of the issuer's liquidation, to subordinate the repayment of the note to that of all other obligations, including the fixed-maturity subordinated notes that have already been issued and those which might subsequently be issued. The principal and interest relating to these securities constitute a subordinated obligation which ranks or will rank only above BANK OF AFRICA's equity securities.

The attention of potential investors is also drawn to the fact that:

• This perpetual debt issue has no set maturity date but may be redeemed whenever the issuer chooses with Bank Al-Maghrib's prior approval, which might in turn have an impact on the expected maturity and the conditions for reinvesting.
• Investment in perpetual subordinated notes includes clauses for writing down the securities' nominal value and cancelling interest payments.

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Perpetual subordinated debt issue - Summary prospectus

• PART I: Overview of BANK OF AFRICA's perpetual subordinated debt issue

1. Offer structure

BANK OF AFRICA envisages issuing 5,000 perpetual subordinated notes, each with a nominal value of 100,000 dirhams. The overall amount issued will be 500,000,000 dirhams, broken down as follows:

• Tranche A, a perpetual note with no maturity date, 5-year adjustable rate, not listed on the Casablanca Stock Exchange, for up to 500,000,000 dirhams, the nominal value of each security being 100,000 dirhams
• Tranche B, a perpetual note with no maturity date, rate adjustable annually, not listed on the Casablanca Stock Exchange, for up to 500,000,000 dirhams, the nominal value of each security being 100,000 dirhams

The total amount allotted to both tranches must not under any circumstance exceed 500,000,000 dirhams. In the event that this debt issue is not fully subscribed, the amount issued will be limited to the amount actually subscribed.

1. Transaction aims

The primary aim of this transaction is to:

• Support the Bank in implementing its corporate strategy up to 2025 and ensure that it complies with regulatory requirements
• Finance the Bank's organic growth in Morocco and overseas
• Pre-emptchanges to regulatory requirements in those countries in which it has operations.

In accordance with Bank Al-Maghrib's Circular No. 14/G/2013, as amended and completed, as to how credit institutions should calculate regulatory capital, the funds raised from this transaction will be classified as additional Tier 1 capital.

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Perpetual subordinated debt issue - Summary prospectus

1. Information about BANK OF AFRICA's perpetual subordinated notes

Warning

A perpetual subordinated note differs from a classic bond in terms of the rank of claims contractually defined by the subordination clause as well as it not having any maturity date. The effect of the subordination clause is, in the event of the issuer's liquidation, to subordinate the repayment of the note to that of all other obligations, including the fixed-maturity subordinated notes that have already been issued and those which might subsequently be issued.

The principal and interest relating to these securities constitute a subordinated obligation which ranks or will rank only above BANK OF AFRICA's equity securities. The attention of potential investors is also drawn to the fact that:

• This perpetual debt issue has no set maturity date but may be redeemed whenever the issuer chooses with Bank Al-Maghrib's prior approval, which might in turn have an impact on the expected maturity and the conditions for reinvesting.
• Investment in perpetual subordinated notes includes clauses for writing down the securities' nominal value and cancelling interest payments, exposing investors to the risks outlined in Section V of this part of the offer document.

1. Characteristics of Tranche A, rate adjustable every 5 years, not listed on the Casablanca Stock Exchange)

Characteristics of Tranche A (Floating rate notes, rate adjustable every 5 years, not listed on the Casablanca Stock Exchange)

Type of securities issued

Legal form

Maximum tranche size

Maximum number of securities issued

Nominal value

Issue price

Maturity

Subscription period

Cum-coupon date

Allotment method

Nominal interest rate

Perpetual subordinated notes not listed on the Casablanca Stock Exchange, entirely in non-physical form and registered in a financial intermediary's account at Maroclear, the central securities depositary

Notes in bearer form

MAD 500,000,000

5,000 subordinated notes

MAD 100,000

100% of the nominal value i.e. MAD 100,000

Perpetual, with the possibility of early repayment from the 5th anniversary of the cum-coupon date, only at the request of the issuer, on condition that notice of at least five years is given and with Bank Al-Maghrib's prior approval.

22-26 June 2023 inclusive

27 June 2023

French auction method with priority given to Tranche A (floating rate adjustable every 5 years), then Tranche B (rate adjustable annually)

Floating rate adjustable every 5 years

For the first 5 years, the nominal interest rate will be based on the benchmark yield for 5-year Treasury bonds traded on the secondary market as published by Bank Al-Maghrib 21 June 2023, plus a risk premium of between 220 and 230 basis points.

This benchmark yield will be published 21 June 2023 by BANK OF AFRICA on its website and 21 June 2023 in a gazette containing legal notices.

Beyond the initial 5 years and for each successive 5-year period, the benchmark rate shall be calculated on the basis of the secondary market benchmark rate for 5-year Treasury bond yields as published by Bank Al-

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Perpetual subordinated debt issue - Summary prospectus

Risk premium

Interest

Maghrib, 5 business days prior to the coupon's latest anniversary for each 5- year period.

To the resulting benchmark rate will be added a risk premium of between 220 and 230 basis points which will be set at the end of the subscription period. Noteholders will be informed of the rate by BANK OF AFRICA via the latter's website 5 business days prior to the anniversary on which the coupon is adjusted and on the same day that the benchmark rate is calculated.

In the event that the benchmark yield for 5-year Treasury bonds is not directly observable on the curve, the benchmark yield will be determined by the linear interpolation method, using both the opening and the closing values of the note's entire 5-year maturity (actuarial basis).

Between 220 and 230 basis points

Interest will be paid annually on the anniversary of the loan's cum-coupon date i.e. 27 June each year. Payment will be made on that day or the first business day after 27 June if the latter is not a business day. Interest on the perpetual subordinated notes will cease to accrue from the date that the capital is repaid by BANK OF AFRICA.

BANK OF AFRICA may decide, at its discretion and with Bank Al-Maghrib's prior approval, to cancel, entirely or partially, interest payments for an indefinite period of time and on a non-cumulative basis to fulfil its obligations (in particular following a request from Bank Al-Maghrib). Following this decision, all amounts of cancelled interest are no longer payable by the issuer or considered as accumulating or owing to holders of the perpetual subordinated notes issued by BANK OF AFRICA. Each cancellation decision will relate to the coupon for which payment was initially scheduled for the next anniversary.

BANK OF AFRICA is required to apply the provisos of Bank Al-Maghrib's Circular No. 14/G/2013 of 13 August 2013 as to how credit institutions should calculate regulatory capital, including Article 10 of the said circular which defines core capital instruments as being equity capital and any other item making up the share capital as well as a requirement to meet a certain number of criteria (listed below), primarily including the proviso which stipulates that dividend or similar distributions should only be made after all legal and contractual obligations have been met and payment in respect of senior equity instruments made, including the perpetual subordinated bonds referred to in this offer document. The criteria mentioned above include the following:

• The instruments are issued directly by the institution with the prior approval of its administrative body
• The instruments are perpetual
• The instruments' principal may not be reduced or redeemed, except in the event of the institution's liquidation and only with Bank Al-Maghrib's prior approval
• The instruments are subordinate to all other claims in the event of the institution's insolvency or liquidation
• The instruments do not benefit from any collateral provision or guarantee from any related party which would see these instruments' claims ranking raised
• The instruments are not subject to any contractual or other arrangement which would see these instruments' claims ranking raised in the event of insolvency or liquidation
• The instruments make it possible to absorb the first and proportionally largest part of the losses as soon as they occur
• The instruments give their owner a claim on the institution's residual assets which, in the event of liquidation and after paying all higher- ranking claims, is proportional to the instruments' issued amount. The said outstanding amount is neither set nor capped, except in the case of equity securities

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