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Angola Eurobonds Fall Most in Three Weeks on IMF Lending Concern

IMF Delays Angola Meeting on Bigger Loan to Allow for More Talks

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.