IMF calls on Angola to manage issue of public debt “sensibly”
[ 2009-11-26
]
Washington, USA, 26 Nov – The International Monetary Fund (IMF) Wednesday called on the Angolan government to implement “sensible” management of its operation to issue public debt to the value of US$4 billion.
“We have asked the authorities to proceed sensibly with the management of the first large bond issue operation to minimise the cost of financing for the country. The savings could be significant over the entire period of the loan,” said Sean Nolan, senior IMF consultant in a telephone press conference held Wednesday.
The stand by programme announced Monday makes it possible for Angola to access funding of US$1.4 billion, but also includes access to other sources of funding “over the next few months.”
According to Nolan, a limit for non-concessional loans was established “which is usual for IMF programmes,” which is due to be made public soon together with all the documents signed by both sides.
According to Renaissance Capital, one of the main investment banks operating in emerging markets, the debt issue could be the most expensive in sub-Saharan African history as Angola will have to offer unusually high interest rates to investors, of between 9 and 9.5 percent.
This si because the country does not have an independent credit rating given by specialised ratings companies such as Moody's Investors Service, Standard & Poor's and Fitch Ratings, and thus risk is perceived to be higher by investors.
The operation, the first of its size organised by Angola on an international level, is intended to fund construction projects at a time when the country is still dealing with the effects of lower oil prices. (macauhub)
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