Angola: Angola to request financial rating to assess quality of credit

2 September 2008

Luanda, Angola, 2 Sept – Angola is preparing to request a credit rating from one of the main international rating agencies, in order to assess the quality of the country’s credit, the Angolan finance minister said Monday.

“It is crucial that we can bring together all the parameters that allow us to have a good rating… perhaps a B+,” Minister José Pedro de Morais told weekly financial newspaper, Jornal de Economia e Finanças.

“At the moment we are preparing our country to request a rating. We are going to choose one of the three agencies in the market,” – Fitch Ratings, Standard & Poor’s or Moody’s, the minister added.

Ratings, which are a maximum of “AAA” and a minimum of “C”, are currently important instruments in the negotiation of credit by a country or company – the return (interest rate) demanded by the creditor will be lower as the probability of not servicing the debt decreases.

A “B” rating for Angola would place the country just above the bottom rung of rated countries/companies, with a “C” rating, but with prospects to improve.

In his interview with the Angolan newspaper, Morais also said he hoped that the World Bank would increase its funding to Angola, in more favourable market conditions, as of December this year.

He also noted that Angola had already paid off its debts to the Paris Club, which brings together 19 of the world’s richest countries.

“We have made great progress. Our Gross Domestic Product (GDP) has doubled every three years. There will be an economic slowdown over the next five years, but the economy will remain strong,” the Angolan minister said. (macauhub)