(Ecofin Agency) - Angola raised USD 1.5 billion through a Eurobond with a maturity of 10 years which rate was set at 9.5%, the minister of Finance, Armando Manuel (photo), announced on 5 November.
For its first foray on the international bond market, Angola thus had to pay an interest rate far higher than scheduled for. The second producer of crude oil in Africa after Nigeria had indeed specified at the end of September that it was hoping for a rate around 8% for this Eurobond which will be used to “finance the economic development” of the country.
The Angolan government indicated that the Euro-obligations were aimed at “making the Angolan State less dependent on traditional sources of funding such as bilateral credit lines and credits from commercial banks”. Luanda informed that the operation may also “improve transparency in terms of management of public accounts and control of financing costs”.
The sharp drop in prices of crude oil on the international market negatively impacted on the public finances of Angola, where hydrocarbons represent 95% of exports and contribute up to 70% to tax revenues.
Scheduled since 2011, the issuance of the first Angolan Eurobond was postponed several times due to the decrease in prices of the black gold. “This first issuance is an extremely important step for our country and we consider it as the beginning of a long term relationship with the international capital markets”, Armando Manuel declared, giving the impression that his country would again seek funding from the international debt market.
