Angola issues US$1.5 billion in sovereign debt on the international market

27 October 2015

Angola announced Monday the launch of sovereign debt on the international market in the form of Eurobonds, totalling US$1.5 billion, under the government’s public finance management policy and taking into account the long-term economic and financial development programme, according to a statement from the Ministry of Finance.

The Angolan President granted Goldman Sachs International, Deutsche Bank and Industrial and Commercial Bank of China (ICBC), authorisation to act as agent banks on behalf of the Republic of Angola in sovereign debt issues.

The sovereign debt issue through the London Stock Exchange after five years of preparations, was intended to find alternative funding sources that can replace traditional sources of finance (bilateral, commercial and credit lines) that show some concentration in Angola’s exposure.

The Finance Ministry’s note said issuing bonds could offer benefits such as diversification of external sources of finance, establishment of long-term sources of funding, a positive impact in terms of assessment by Credit Rating Agencies, construction of an Income Curve and possible growth of international reserves.

Also according to the Ministry of Finance in order to issue sovereign debt the Angolan government, in addition to obtaining technical and legal advice from internationally-renowned financial institutions, such as Goldman Sachs, JP Morgan, the World Bank and International Monetary Fund, has undergone regular assessments by the main international credit rating agencies.

Following the consultation process, the Ministry of Finance considers that “it was clear that Angola could benefit greatly from sovereign debt issuance on international markets, not only because it could benefit from diversification of external sources of funding, but also because it was found that due to the sensitive social, political and economic progress that the country has obtained since the end of the armed conflict, there would be great interest from European and American investors in any assets that the Angolan government were to issue.” (macauhub/AO)