Morning Commentary: Angola bonds tighten on potential IMF support; South Africa better

By Rebecca Melvin

New York, Aug. 22 – Angola’s sovereign curve has benefited from word that the African nation has sought funding assistance from the International Monetary Fund, according to market sources on Wednesday.

The Angola 9 3/8% notes due 2048 are tighter by 27 basis points on the week to a dollar price of 104 bid, 105 offered, a London-based trader said.

Angola said it asked to add a financial component to its IMF assistance program due to lower-than-expected economic growth this year.

IMF deputy managing director Tao Zhang said in a statement on Tuesday that the request followed an IMF staff mission visit to Angola Aug. 1-14, and that the fund will initiate program discussions with Angolan authorities as soon as feasible.

Angola is an oil exporter that has been hurt by lower oil prices and lowered oil production. Angola’s finance minister said the IMF funding, the amount of which has not been specified, will be used to help reform and diversify the country’s economy.

Elsewhere, South Africa’s sovereign curve was mostly tighter on Wednesday although the shortest-dated notes, the South Africa’s 6 7/8% 2019 notes, were wider by 9 bps for a dollar price of 102¼ bid, 102¾ offered.

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