Angola plans to generate $2.5 billion by issuing dollar-denominated bonds, banking on increased oil prices linked to the ongoing Iran–Israel conflict to attract robust investor interest.
The nation, Africa’s third-largest oil producer, is offering $1.5 billion in seven-year bonds with a yield of 9.375% and an additional $1 billion in 11-year bonds at 9.875%, according to a source familiar with the transaction. Both yields came in roughly a quarter-point below initial guidance.
Bloomberg reported that total orders exceeded $5.2 billion, indicating strong demand from investors.
Purpose of the Bond Sale
Funds raised from this issuance will be partially used to support Angola’s offer to repurchase 8.25% notes maturing in 2028, although the government is not obliged to buy any specific bonds tendered.
The sale coincides with Angola’s attempt to take advantage of renewed appetite for resource-linked assets. Disruptions in global oil supply caused by tensions between the US, Israel, and Iran have lifted crude prices, making producers outside the Middle East, such as Angola, more attractive to the market.
This bond issuance follows a previous dollar-denominated offering in October, when Angola raised $1.75 billion. However, the current sale occurs amid increasing borrowing costs that have posed challenges for many emerging-market issuers.