Angola hit with $200mn JPMorgan margin call as African bonds tumble

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Angola injected nearly $200mn to shore up a $1bn loan from JPMorgan that was backed by the country’s bonds, after the dollar debts of the oil-producing African nation tumbled with crude prices in the recent global market rout.

Angola’s finance ministry told the Financial Times on Friday that it used the cash to meet a margin call on the loan as volatile oil and debt markets hit the value of about $2bn in debt that was used as security.

“For Angola, this has led to our bonds trading at a discount, triggering the need for a margin call, which we have fulfilled promptly and in cash . . . Angola respects its contractual obligations,” the ministry added. JPMorgan declined to comment.

The margin call on Angola reflects the financial strain that this week’s turmoil across markets is imposing on poorer nations that were already struggling to bring down double-digit costs to issue new debt.

Prices of Angola’s other dollar bonds fell sharply this week, sending their yields to just under 15 per cent on Friday, after a plunge in crude prices to just over $60 a barrel on fears of a global recession over Donald Trump’s tariffs.

Prior to the sell-off, President João Lourenço’s government had been working to regain access to bond markets, signalling that it did not intend to ask the IMF for a bailout and sounding out investors on a potential issuance.

Yields for Gabon, another African oil producer, also rose to about 15 per cent this week, as preparations by Opec for an increase in output over April and May also hit oil prices. Angola quit the oil producers cartel in 2023.

Falls in bond prices now imply developing countries across Africa and Asia would need to pay well over 10 per cent in interest to issue new dollar debt.

Some nations such as Kenya, Egypt and Pakistan have turned to IMF bailouts in the last year to limit the risk of refinancing their debts in the years ahead while committing to painful reforms.

In recent months, many governments have also turned to private loans or other ways of raising money in the short term.

Angola issued the bonds subject to the margin call earlier this year to secure a one-year loan from JPMorgan, known as a total return swap.

The deal was designed to tide Angola over to cover debt payments that come due this year while it remained too costly to issue a regular US dollar bond, people familiar with the transaction said.

This week the bonds were marked down from just under 100 cents on the dollar to as low as 85 cents on Monday. That sent their value below half of the loan. On Friday, the bonds were marked at about 90 cents.