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Angola to test African Eurobond appetite

Euromoney, February 16, 2015

Angola to test African Eurobond appetite

Angola could become the first African sovereign bond borrower since the great oil price crash this year in a debut deal that will set the tone for frontier-market debt.

Analysts suggest Angola's net debt position is sustainable, though credit-rating agencies highlight risks due to the 40% fall in oil prices since early 2014. Standard & Poor's downgraded the sovereign on Friday from BB-/B to B+/B. Fitch and Moody's rate Angola at BB- and Ba2 respectively. 

Tiago Dionisio, Assistant Director at Asset Management and Brokerage firm Eaglestone, says: "Debt sustainability isn't an issue at the moment. Total debt is worth $48.3 billion and the debt-to-GDP ratio is 35.5% - the international component of which is 24.5%. "This may appear big compared to African standards, but given the size of the economy this is actually quite low." He adds: "Angola also has ample foreign exchange reserves at $27 billion, according to the central bank, worth around seven to eight months import cover."

http://www.euromoney.com/Article/3427897/Angola-to-test-African-Eurobond-appetite.html?single=true