Angola has agreed with JPMorgan Chase & Co. to roll over a $1 billion loan and secure an additional $500 million in financing, the Ministry of Finance said.

The new three-year facility carries an interest rate of about 8%, compared with roughly 9% on the original loan, according to a ministry spokeswoman.

Senegal, Gabon and Cameroon have increasingly turned to so-called “off-screen” financing in recent months, including private bond placements, as heavy debt burdens and political uncertainty shut many low-rated African countries out of conventional markets.

The yield on bonds Senegal placed privately last year was nearly 100 basis points higher than on its outstanding 2031 Eurobond, underscoring the rising cost of debt for governments already struggling to fund health, education and other basic services.

Analysts say such loans typically come at premiums of 150 to 200 basis points over existing bonds.

Angola, southern Africa’s second-largest crude exporter, has become emblematic of the region’s financing dilemma. Burdened by large external debts, including oil-backed loans from China, it entered into a one-year total return swap with JPMorgan in December, a rarely used structure backed by newly issued dollar bonds.

The government did not raise cash through the $1.9 billion bond issuance. Instead, it used the bonds as collateral to secure two loan tranches of $600 million and $400 million from JPMorgan, keeping the debt off its balance sheet.

Its Eurobonds slumped when investors sold off riskier assets after U.S. President Donald Trump announced sweeping new trade tariffs.

Angola’s 2030 bond, which underpins the JPMorgan deal, fell from par at the end of March to 86 cents on the dollar during the sell-off, before recovering to around 95 cents.

Source: Africabusinessinsider