It takes some brazenness for a nation rated six steps into junk territory and with the world’s worst-performing currency to issue a Eurobond in this market.
But Angola did just that on Monday, selling $500 million of 30-year debt in only the third dollar-denominated deal from an emerging-market government since May.
The sale suggests that even with sentiment toward emerging markets turning much more bearish in the past three months, some investors still can’t resist higher returns. Angola, which was increasing, or tapping, its $1.25 billion 2048 notes first issued in May, paid a yield of 9.1 percent in a deal arranged by Deutsche Bank AG, Goldman Sachs Group Inc. and Industrial & Commercial Bank of China Ltd.
Angola, rated B- by S&P Global Ratings, is scarcely without problems. The OPEC member’s economy was battered by the crash in oil prices four years ago and is yet to recover. The central bank has devalued the kwanza by 35 percent this year in a bid to end huge shortages of foreign exchange.
But the above-average yields have gone down well with investors. Angola is the third-best performer this year in the Bloomberg Barclays Emerging Markets USD Sovereign Bond Index, which includes more than 70 countries. Its Eurobonds have returned 0.8 percent, compared with an average loss among peers of 3.5 percent. The tap even came with a lower yield than on the original, which paid 9.4 percent.