The 2028s were on Tuesday morning trading a Z-spread of about 525bp or a yield of around 8.5%, said a syndicate official in London. That equates to a cash price of around 101.
“The IMF news has had a huge, positive impact,” said the syndicate banker at that time. “But the broader markets are so illiquid right now you have to take the levels with a pinch of salt until people come back in September.”
But by Wednesday an EM trader in London said that those bonds were up three points on the week, caught up in a broader EM rally, but they lost half a point on Thursday as investors started to fear that the country would try to tap the dollar bond markets before that IMF deal, said the trader.
Angola said in a statement on the Ministry of Finance website that the real gross domestic product growth rate for 2018 has been more subdued than expected, reflecting a sharp reduction in oil and gas production. It said that for this reason, “a negative impact on the fiscal and external accounts and an increase in the current account deficit is expected”.
It said that the country needed the additional financing to facilitate the implementation of its macroeconomic stabilisation programme and the national development plan 2018-2022, but did not give any detail as to the size of the additional financing requested.
“The mission of the IMF staff was invited to visit Luanda again in October 2018 in order to begin negotiations under a two year Extended Fund Facility, to be extended in one more year if it proves necessary,” said the statement.
Angola is rated B3/B-/B. A week ago Standard & Poor's affirmed its B- rating on the country and kept the outlook as "stable", anticipating that the prospect of GDP growth for this year is 2.2%, accelerating to 3.0% throughout 2019 to 2021.
According to Dealogic, the country has outstanding $1bn 7% August 2019s, $1.5bn 9.5% November 2025s, $1.75bn 8.25% May 2028s and $1.75bn 9.375% May 2048s.