Africa’s second-largest oil exporter gets $200 million collateral back from JPMorgan after bond rally
Angola retrieved $200 million in May from collateral it had posted earlier this year to JPMorgan, following a rebound in the price of its sovereign bonds, the country’s finance ministry said.
The repayment came after a sharp sell-off in April triggered a margin call under a $1 billion total return swap agreement between Angola and JPMorgan, signed in December.
The one-year derivative deal was backed by $1.9 billion in newly issued Eurobonds, which did not raise fresh cash for the government but served as collateral.
As oil prices tumbled amid global tariff tensions, the value of Angola’s bonds, quoted at 100 cents on the dollar in March, fell to 86 cents, prompting JPMorgan to demand additional security.
The bond has since recovered and was quoted back at 100 cents on Wednesday, traders said.
The structure of the deal has drawn criticism from some analysts due to its complexity. Total return swaps are rarely used in sovereign finance, and Angola’s use of one shows the rising trend of opaque or unconventional borrowing among heavily indebted, low-rated African nations.
The $1.9 billion bond used as collateral for the swap matures in 2030 and is listed on international markets. The financing from JPMorgan was split into two tranches, $600 million and $400 million, though it did not involve the issuance of new funds for public spending.
Source: africabusinessinsider
