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Angola eyes return to bond markets

Angola will return to international capital markets this year to sells Eurobonds, its finance minister has said.

The southern African country last issued dollar bonds in late 2019 to fund ambitious reforms.

But yields spiked to 30% in March 2020, during the market rout caused by the global health crisis.

Angola suffered a series of downgrades that drove its sovereign rating into the "substantial risk" category.

But with borrowing costs having come down, finance minister Vera Daves de Sousa said the government is looking for ways to cover parts of its $4 billion external funding needs.

"In our GDP, we have gross domestic finance in need of 13% of GDP - we expect that from that, 7% of GDP we will raise internally on our domestic market and 5.6% of GDP we will raise on the external market but in a mixture of credit lines and eurobond markets."

Ratings agency Fitch upgraded Angola from CCC to B- on Friday (January 21). Moody's did the same in September.

Speaking from Luanda on Monday (January 24), Daves de Sousa also said a slow-moving plan to partially privatize state oil firm Sonangol would be further delayed by two years.

Sonangol is aiming to sell off non-core businesses and, as the crown jewel of a broad privatization push, list a 30% stake.

While authorities initially aimed to launch the IPO before 2022, Daves de Sousa said restructuring along with asset recovery and registration work were not complete.

"The balance sheet of Sonangol should reflect in a very transparent way, the assets that they have and today it doesn't."

The minister said pre-IPO due diligence on Sonangol, as well as state diamond miner Endiama and airline TAAG, could begin this year.