• Angola extended a $1 billion debt facility with JPMorgan to 2028
• The deal includes $500 million in additional financing at under 8%
• The structure offers cheaper liquidity than recent Eurobond issuance

Angola has secured a three-year extension of a $1 billion debt facility initially agreed for 12 months in 2024 with JPMorgan Chase. The Ministry of Finance announced yesterday that the country has also secured an additional $500 million from the banking institution.

The new agreement, now running through 2028, carries an interest rate “below 8%,” compared with close to 9% for the initial facility, the authorities said. It is structured as a Total Return Swap (TRS), allowing the state to access liquidity without issuing a conventional Eurobond.

The financing cost remains lower than that of the Eurobond Angola issued last October, which carried yields ranging from 9.25% to 9.78% for nearly $1.75 billion raised. That operation marked the country’s return to international markets after several months of restricted access and high volatility and ranked among the most favorable pricing levels achieved by the issuer in recent years.

A positive signal for markets

The announcement was well received by investors. Angolan sovereign bonds continued to recover, with the 2048 maturity gaining about one cent to trade around 87 cents on the dollar.

A southern African oil producer, Angola had secured the initial agreement using $1.9 billion in sovereign bonds as collateral. In April, JPMorgan triggered a margin call, requiring Luanda to post an additional $200 million after bond prices fell amid turbulence linked to U.S. tariffs. The authorities later recovered the collateral once prices rebounded.

Off-market financing increasingly favored

Like other African states with still-constrained credit profiles, Angola has turned to off-market financing—such as private placements, collateralized loans, or derivative instruments—to smooth cash flow needs and avoid international bond issuance at prohibitive costs.

In a context of high interest rates and limited market access, countries including Senegal, Gabon, and Cameroon have also relied, to varying degrees, on bilateral or non-public financing solutions to manage debt maturities. In one of its latest reports, the International Monetary Fund (IMF) notes that these instruments, often complex and backed by guarantees, can expose states to higher liquidity and contingent liability risks, urging caution and a preference for cheaper and more transparent financing.

With a debt-to-GDP ratio of 70% in 2024, according to the Ministry of Finance, Luanda argues that investor risk perceptions do not fully reflect its repayment capacity. The agreement with JPMorgan is presented as a transitional tool to smooth maturities and avoid increasing the eurobond stock under conditions deemed unfavorable.

Gradual return to the domestic market

At the same time, Angolan authorities plan to issue domestic bonds with seven- and ten-year maturities, denominated in kwanzas as well as in foreign currencies. The aim is to diversify the investor base, strengthen the local market, and gradually reduce reliance on complex external financing.

Fiacre E. Kakpo