By Abdi Ali
Published October 31, 2015
Angola has announced the launch of sovereign debt bonds amounting to USD$1,500,000,000 on the London Stock Exchange.
Issued under the country’s Executive public finance management policy and in accordance with the long-term economic and financial development programme, Angola is said to be seeking not just the diversification of sources of external financing but the establishment of long-term funding sources as well.
The move is also viewed as having ‘positive impact in terms of evaluation of Credit Rating Agencies’ that could lead to possible increase in international reserves.
The country’s Ministry of Finance says the journey that has culminated in the launch of sovereign debt bonds began in 2011 with discussions and consultations.
“From the subsequent discussions it emerged that a sovereign issuance could potentially contribute significantly to enhancing the country’s image abroad, especially with regard to concerns relating to transparency in the management of public finances and the costs associated with the process of funding the general budget of the state, as these are essential in determining the solvency indicators of a country to honour its debt commitments in domestic and foreign currency,” the Ministry says in a statement issued on October 26, 2015 through African Press Organisation.
“From this broad consultation process it became apparent that Angola could benefit greatly from sovereign issuance in international markets, not only because it could benefit from diversification of external sources of funding, but also because it was found that following the considerable social, political and economic progress that the country had achieved since the end of armed conflict, European and American investors would be greatly attracted to investing in the bonds that the Angolan state was to issue.”
Three international financial institutions—Goldman Sachs International, Deutsche Bank, and Industrial and Commercial Bank of China (ICBC)—have been authorised to act as agent banks on behalf of the Republic of Angola for the sovereign issuance that the country is now carrying out.