Angola raises $1.5 billion in debut Eurobond to fund growth
The oil-producing southern African nation has said it issued the sovereign debt in order to be less dependent on traditional sources of credit such as bilateral and commercial funds.
we view this as the beginning of a long-term relationship with the international capital markets
Angola has suffered from the lower price of crude, weakening its currency nearly 50 percent against the dollar this year.
The government has said that a sovereign issuance could enhance Angola’s transparency in the management of its public accounts and better manage the state’s financing costs.
“This inaugural issue is an extremely important step for our country and we view this as the beginning of a long-term relationship with the international capital markets,” Finance Minister Armando Manuel said in a statement.
Manuel did not give details of how the cash raised would be used. He concluded a 10-day roadshow in New York on Wednesday, after visiting markets across the U.S. and Europe, officials said, gathering more than 100 potential investors who included fund managers, banks and pension funds.
Angola, which started the process to issue the Eurobond in 2011, delayed proceedings after its economy was hit by the fall in oil prices. Rated Ba2 by Moody’s and B+ by Standard & Poor’s and Fitch, it hired Deutsche Bank as leader of a consortium that included Goldman Sachs and ICBC International to arrange the meetings with U.S. and European investors.
Angola’s economy will grow more slowly than expected this year, the government has said, as the subdued oil prices sap public spending, hobble the currency and push up debt levels in Africa’s second largest crude exporter.
Luanda in October cut its 2015 growth forecast to 4 percent from a previous estimate of 6 percent. Angola relies on oil exports for two-thirds of tax revenue and 95 percent of foreign currency receipts.