Angola is signalling a potential return to the international debt markets, though such a move is unlikely to happen before next year. The decision follows a marked improvement in the country’s eurobond yields, which have fallen from record highs that forced Luanda to postpone a planned issuance earlier this year.
“Angola sees the international debt market opening up to the country again,” said Dorivaldo Teixeira, head of Angola’s debt-management unit, in a telephone interview from the capital. However, Teixeira stressed that a eurobond sale this year remains improbable unless international financing costs continue to fall.
The southern African nation had conducted a global roadshow earlier in the year, with initial plans to sell bonds in April or May. Those plans were derailed by rising geopolitical tensions and falling oil prices. On 11 April, yields on Angola’s 2032 eurobonds climbed to a record 14.95% amid market volatility triggered by former US President Donald Trump’s tariff announcement.
Since then, yields have eased to 10.83%, while the spread over US Treasuries has narrowed by 366 basis points. Teixeira expects the gap to close further, aligning Angola’s borrowing costs with those of Nigeria, whose 2032 bonds currently yield around 8.26%.
Improved Credit Conditions Bring Relief
Lower yields have already had tangible benefits for Angola. The government has reclaimed $200 million in collateral from a loan with JPMorgan Chase & Co., thanks to improved credit conditions. As Africa’s third-largest oil producer after Nigeria and Libya, Angola is entering a period of peak loan repayments, with $864 million due on a bond maturing in November.
For the time being, Angola will rely on the domestic market, multilateral lenders, and private borrowing to manage its debt profile, extend maturities, and reduce costs. Teixeira did not provide details on specific loan arrangements but highlighted the resilience of the domestic debt market.
“Angola continues to seek to diversify its financing sources through debt issuances and loans in private markets,” he said.
Teixeira attributed the improving sentiment to Angola’s better economic prospects, falling inflation, and government efforts to reduce dependence on oil. According to the International Monetary Fund, Angola’s debt-to-GDP ratio likely fell to 62% in 2024 from 71% the previous year.
A Cautious Path to Market Re-entry for Angola
While Angola’s improving yields and debt profile suggest that a eurobond issuance is again within reach, the timing remains uncertain. The government appears focused on balancing the benefits of accessing global capital with the risks posed by volatile commodity markets and shifting geopolitical conditions.
From an unbiased perspective, Angola’s measured approach reflects lessons learned from past volatility. The government is resisting the temptation to rush back to international markets simply because borrowing costs are improving. Instead, it is prioritising debt sustainability and economic diversification, both of which will be crucial in ensuring that any future bond sale strengthens, rather than strains, the country’s financial position.
