Angola plans to sell about $1.5B in eurobonds: finance ministry

Angola plans to sell about $1.5B in eurobonds: finance ministry

Angola is set to issue about $1.5 billion in eurobonds, according to the country's finance ministry. The sale, which is expected to include both five- and ten-year dollar debt, comes after a period of favorable market conditions for the oil-rich nation. The initial price talk for the 2030 bonds is in the 9.75% area, while the 2035 note is expected to have a yield of around 10.5% .

The issuance is a strategic move by Angola to refinance its debt, specifically a $864 million bond due to mature in November. This refinancing comes as yields on Angola's dollar bonds have eased from record highs, providing an opportunity for the country to secure more favorable terms. Kenya's recent $1.5 billion eurobond sale, which was almost five times subscribed, highlights the strong demand for high-yielding bonds from African issuers .

Angola's decision to return to the eurobond market reflects its efforts to stabilize its finances. The country has benefited from rising crude output and stable prices, which have bolstered its financial position. Additionally, the government has implemented reforms such as reducing fuel subsidies to lower debt and ease pressure on the budget .

The yield on Angola's exiting debt due in 2032 climbed to 9.92% by 10:01 a.m. in London, indicating a narrowing yield premium over US Treasuries to the least in almost 15 months . This suggests that investors are increasingly willing to take on the risk associated with Angola's debt, providing the country with a favorable window for refinancing.

Angola's long-term foreign debt is currently rated B-, or six steps below investment grade, with a stable outlook at S&P Global Ratings. The country's move to issue eurobonds is likely to attract investors seeking high-yielding bonds in the African market.