Angola has reached an agreement in principle with JPMorgan Chase & Co. to roll over a $1 billion loan that was set to mature at the end of this year, the country’s finance ministry said.
Details of the renewed arrangement, including the maturity, interest rate, and the assets that will secure the facility, are still being negotiated, a ministry spokesperson said.
Luanda signed the original $1 billion total-return swap with JPMorgan in December, using nearly $2 billion worth of its dollar bonds as collateral. The annual interest rate of the loan is approximately 9%, according to Bloomberg.
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Bond yields improve
The government’s move comes as yields on Angola’s dollar bonds have eased from record levels, improving its ability to seek better terms or tap international markets again.
Angola’s 2032 eurobonds now yield just under 10%, down from almost 15% in April.
The country, Africa’s third-largest oil producer, returned to global debt markets last month, raising $1.75 billion in its first eurobond issuance since 2021. The five- and 10-year tranches were priced at 9.25% and 10.125%, respectively.
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The JPMorgan arrangement drew scrutiny in April when Angola was forced to post an additional $200 million in collateral after a margin call triggered by falling oil prices, which dragged down its sovereign bond values. The funds were returned in May.
Angola’s public debt is about 55% of GDP, below the 60% ceiling set by its fiscal sustainability law, Secretary of State for Finance and Treasury Ottoniel dos Santos said in October.
Still, the IMF warned in a September report that the country faces elevated near-term financing pressures due to large external debt maturities.
