Angola Eurobonds Fall Most in Three Weeks on IMF Lending Concern

Angola’s Eurobonds fell the most in three weeks as a postponed International Monetary Fund meeting raised concern that the southern African nation may face obstacles to obtaining a bigger loan from the institution.

The IMF executive board meeting, which had been scheduled for Thursday, was delayed to give the fund more time to work with Angolan authorities, a spokesperson for the Washington-based organization said, without providing more details. The meeting will need to take place once members return from a recess that runs the next two weeks, the spokesperson said.

The yield on the nation’s 2025 dollar bonds rose 28 basis points to 11.82%, the biggest increase since July 10.

Africa’s second-biggest oil producer said earlier this week that it wants to increase its IMF loan to $4.5 billion from $3.7 billion to overcome a crisis triggered by lower crude prices and the coronavirus outbreak. The nation needs the money to finance its budget deficit.

In 2018, the IMF had a total of $4.5 billion available for Angola, when it approved a three-year extended arrangement. At the time, many -- including the IMF -- advised the nation to seek a lower amount so that it could increase the value of its program in case it was necessary, State Secretary for Finance and Treasury Osvaldo Joao said in a July 27 webcast.

Angola, which depends on oil for more than 90% of its export revenue, is facing a prolonged recession. The government is also currently in talks with key creditors to reschedule debt payments.

©2020 Bloomberg L.P.

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