Angolan government waits for more favourable conditions to issue Eurobonds

26 March 2020

The Angolan government is waiting for more favourable market conditions before issuing more public debt in Eurobonds as authorised by Presidential Decree on 18 March, daily newspaper Jornal de Angola reported.

The source cited by the newspaper, after saying that the government had not started negotiating the issue worth up to US$3 billion, said that the Presidential Decree only established the necessary institutional conditions for the bond issue and is the result of the approval of the current General State Budget, which opens the way to taking on more foreign debt.

The source noted that, following the decree, which authorises the Minister of Finance to negotiate the debt issue, the authorities are waiting for better market conditions, as, due to the situation caused by the new coronavirus pandemic, investors have demanded damaging conditions for debt of African nations.

The interest rates demanded by investors to trade Angolan debt due to mature in 2025 stand at around 23.5%, or three times the figure at the beginning of the month, according to figures from the Bloomberg new agency, which reported that the financial market is, in effect, closed to African issuers due to investor fears.

The issue authorised on 18 March and is the fourth in which Angola has issued Eurobonds since 2015, when the Government took on debt of US$1.5 billion at a coupon of 9.5%, with total demand of US$7.5 billion. In 2018 Angola placed US$1.75 billion in 10-year Eurobonds, at a rate of 8.25% and US$1.25 for 30 years, paying interest of 9.375%.

In 2019 the Government issued US$3 billion in 10-year and 30-year Eurobonds at rates of 8.00% and 9.12%, respectively. (macauhub)