Finance evaluates the market for new debt issuance in foreign currency – Jornal OPaís

Economist understands that interest rates will influence the investor’s decision to choose to invest in Angola’s treasury bonds, giving up investments in other securities issued by foreign institutions

The Ministry of Finance announced that it intends to issue debt in foreign currency, as part of the strategy to promote the public securities market, by issuing National Treasury Bonds in Foreign Currency. According to data from MINFIN, led by Vera Daves de Sousa, the operation is open to all interested parties, without giving dates or amounts, specifying that the format will be ‘Bookbuilding’, a process that serves to evaluate the market the interest in the securities that the issuer wants to put.

The maturity, according to data from this financial institution, will be seven and ten years, with maturities in October and November 2031, and July and December 2034, respectively, and the bonds to be issued will pay coupons on a semi-annual basis. With this issuance, the Ministry of Finance intends to raise resources in foreign currency and in national currency, according to the data, inviting interested parties to contact, for subscription purposes, any financial institution authorized to operate in the local securities market, namely , banks, distribution companies and brokers.

Economist defends attracting investors

In reaction, economist Eduardo Manuel considers that the Bookbuilding method was chosen because it is the way in which the Ministry of Finance can control the issuance of bonds, that is, the aim is to issue bonds through market demand, with the price indicated by the investor. “The interest of investors will determine the quantity of bonds to be issued and their price”, he highlighted.

The expert clarifies that the main determining factor for emissions is the need to raise foreign exchange in foreign currency, due to the fact that the stock of foreign exchange has only been supplied through exports and remains insufficient to meet the needs of the Angolan economy. Eduardo Manuel said that interest rates will influence the investor’s decision to choose to invest in Angola’s treasury bonds, giving up investments in other securities issued by foreign institutions. “MINFIN should offer attractive interest rates, in order to attract small and large national and foreign investors”, he emphasized.

For Eduardo Manuel, minister Vera Daves de Sousa assesses the market as promising for investment and sees the issuance of OT as an alternative for investors to invest in the Angolan economy. Fellow economist Marlino Sambongue considers that the Ministry of Finance is implementing the strategy approved in the Annual Debt Plan for the year 2024 which envisages, among other operations, the capture of domestic debt, through the issuance of treasury bonds in foreign currency.

This issue, he continued, must have maturities of 7 and 8 years in the global amount equivalent in dollars to 152 billion Kwanzas and non-adjustable treasury bonds with maturities of 7 and 10 years in the global amount of 380 billion Kwanzas. The defined deadlines, said Marlino Sambongue, allow the State to better manage the liabilities it holds, looking at its projection of redemption of internal and external debt in the years 2031 and 2034. For the economist, these deadlines look at the projection of redemption for 2031 of around two billion Kwanzas and for 2034 around 500 billion Kwanzas, which demonstrates a strategy of capturing longer-term debt.

BY: Francisca Parente