Angola has recovered $200 million in collateral from JPMorgan, which it had been required to post earlier this year, after the price of one of its bonds rebounded and eased pressure on its finances, the finance ministry said.
The refund was received in May. In December, JPMorgan and Angola agreed on a $1 billion, one-year derivative deal known as a total return swap, backed by $1.9 billion in the country’s government dollar bonds.
But in early April, JPMorgan demanded additional security after a sharp drop in oil prices, triggered by tariff-related market turmoil, drove down the value of Angolan bonds used as collateral.
“The improvement in the price of Angola’s Eurobonds has a positive impact, allowing the amount paid in compliance with the margin call to be returned to the State.
This refund has already taken place,” the finance ministry told Reuters. JPMorgan declined to comment.
The collateral bond’s price fell from 100 cents on the dollar at the end of March to a low of 86 cents during the April selloff, when the margin call was issued.
It has since recovered to 100 cents, the same level as in March, according to traders.
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Angola, heavily indebted to multiple creditors including China through oil-backed loans, faces slowing economic growth and social unrest following violent protests over a fuel price hike caused by the removal of oil subsidies.
Under the total return swap with JPMorgan, the government received two financing tranches, $600 million and $400 million.
The $1.9 billion in newly issued bonds provided as collateral did not generate direct cash for the country.
The bond, which matures in 2030, is listed internationally and its price typically moves in line with broader market trends and Angola’s other bonds.
Total return swaps are considered complex and risky financing tools and are rarely used by governments.
Angola’s arrangement with JPMorgan has added to concerns that heavily indebted, low-rated African nations are increasingly relying on “off-screen” financing such as bank loans, private placements, and derivatives, deals that can lead to risks including sudden margin calls and higher interest costs.
The African Development Bank estimates Africa’s total debt has surpassed $1.8 trillion, with three sovereign defaults in the past four years, prompting more unconventional borrowing as governments struggle to meet financing needs.
In Angola, there is growing concern about reduced social spending despite rising demands for infrastructure investment, such as road projects.
The International Monetary Fund recently cut the country’s 2025 preliminary growth forecast to 2.4% from 3%, citing weaker crude oil prices and tighter external financing conditions.
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