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Bonds worth USD 3 billion have been issued onto the London Stock Exchange by Angola, as it continues to raise fund for its economic reform programme.
Angola has issued its first ever global debt programme and third international sovereign bond, worth a total of USD 3 billion, as part of efforts to diversify its economy.
The USD 1.75 billion 10-year bonds and USD 1.25 billion 30-year bonds have been admitted to the London Stock Exchange’s regulated market.
Global co-ordinators for the programme were Deutsche Bank and Standard Chartered Bank, both of which also acted as joint lead managers with ICBC.
Angola was represented by a London-based team from international law firm Norton Rose Fulbright, consisting of capital markets partner Peter Young, senior associate Vishal Mawkin, associates Ade Olunowo and Jennifer Carr, and infrastructure and project finance partner Madhavi Gosavi, as well as New York-based senior tax counsel Richard Wright.
Young said in a statement “This offering attracted strong interest from high quality investors, particularly in the United States and London, resulting in investor orders totalling USD 8.4 billion.”
He praised the Angolan government team, which led the roadshow promoting the deal, led by minister of finance Vera Esperança Daves de Sousa. He continued: “The success of the offering also demonstrates the continued confidence of the international investment community in Angola’s sovereign bonds and its economic reform agenda.”
Gosavi said the firm’s work was part of an established 40-year relationship with the Angolan government. “Following the election of President [João] Lourenço in August 2017, the success of this transaction reaffirms Angola’s high standing in the international capital markets and the government’s extensive economic reform agenda.”
Angola made its first international bond issuance in 2015. The country is currently in reform programme launched in January 2018 with the intention of building financial sustainability and economic growth, and in particularly reducing the ratio of public debt to its GDP.
The programme has operated under an International Monetary Fund (IMF) extended fund facility since December 2018, through which USD 990 million was provided to Angola to support the reforms. In June this year, the first review of the programme took place, after which USD 248 million in disbursements was released by the IMF.
The country’s economy is currently reliant on the oil and gas sector, which still presents significant investment and development opportunities, but was hit hard by the 2014 oil price drop. In August, a French oil and gas company took an USD 80 million stock in Angolan oil blocks.
Angola was one of the mid-ranked countries on the African Financial Markets Index published by Absa and OMFIF last month.
The Africa Finance Corporation recently secured the close of a USD 140 million loan facility.
By Andrew MitznerSource: African Law & Business