Strong scenario for Angola’s Eurobond issuing

Eurobond-crpt

“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” writes Kanika Saigal in an article published by Euromoney and titled “Angola to test African Eurobond appetite”.

Goldman Sachs, BNP Paribas and the Industrial and Commercial Bank of China were authorized by president José Eduardo dos Santos to lead Angola’s debut Eurobond, which has been delayed since 2013. According to “Euromoney”, Angola could “join the growing pack of African sovereign Eurobond issuers this year, in a deal that will test investor appetite to finance frontier-market governments amid a strong dollar and weak oil prices”.

“Angola could be the first Eurobond issuer from Africa in the post oil-price collapse environment,” says Stuart Culverhouse, chief economist and head of research at Exotix. “Although there is still appetite for emerging-market debt, it will be interesting to see what investor appetite will be like in this case.” A Eurobond issue would reflect Angola’s bid to diversify its sources of capital-raising.

Anthony Lopes Pinto, CEO at Imara Securities, a local brokerage firm in Angola, says the Eurobond is likely to be well-received in the market.  “My guess is that the bond will be at least $1 billion over 10 years, but it will be eventually determined by the appetite in the market, so it wouldn’t surprise me if they end up raising $2 billion or even $3 billion, given Angola’s positive economic growth, positive geopolitical situation, and the search for yield by global investors,”  (Source: Euromoney)

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