Angola has extended a one-year $1 billion debt facility with JPMorgan for an additional three years and has also secured an extra $500 million in financing, the country’s finance ministry said on Tuesday.
The new three-year agreement carries an interest rate “within 8%,” the ministry told Reuters, compared with just under 9% on the original facility.
Angola and JPMorgan first entered into the one-year derivative agreement, known as a Total Return Swap, in 2024. JPMorgan declined to comment on the extension.
Following the announcement, Angola’s bond prices continued earlier gains, with the 2048 bond trading one cent higher at 86.97 cents on the dollar.
“News of a three-year transaction and an additional $500 million of financing will be well received by the market,” said Samir Gadio, head of Africa strategy at Standard Chartered in London.
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The original deal between the Southern African oil producer and the Wall Street bank was backed by $1.9 billion in Angolan government bonds that were issued as collateral.
In April, JPMorgan issued a margin call that required Angola to post an additional $200 million in collateral after the value of those bonds fell below a trigger level when broad U.S. trade tariffs unsettled global markets. Angola later recovered the additional collateral after bond prices rebounded.
Angola is among several lower-rated emerging economies, including Senegal, Gabon and Cameroon, that have turned to so-called off-screen deals such as private placements to better manage debt and repayments.
Angola’s debt-to-GDP ratio stood at 70% in 2024, and finance ministry officials said investor perceptions of the country’s risk did not reflect its actual ability to repay.
Officials added that the JPMorgan transaction worked well for Angola because it allowed the government to avoid issuing new Eurobond debt at a time when borrowing costs were high.
The finance ministry also said on Tuesday that it plans to issue new seven-year and ten-year domestic bonds, denominated in both local and foreign currencies.
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Imaage Credit: Global Finance Magazine
