By Henrique Almeida
LUANDA, Nov 5 (Reuters) - Oil-producing Angola will seek its first ever sovereign credit rating in a bid to improve its credibility abroad as it tries to sell $4 billion in bonds to foreign investors, its economy minister said on Thursday.
In a telephone interview with Reuters, Manuel Nunes Junior said JP Morgan had been appointed to lead the bond placement, but that talks with the main credit rating agencies had not yet begun.
'JP Morgan is the lead manager in the bond issue,' Nunes Junior said. 'We will also work to get a credit rating.'
A potential economic powerhouse in Africa, Angola has surpassed Nigeria to become the continent's biggest oil producer, but it does not have a credit rating, making it tougher to sell its debt abroad.
The government said on Wednesday it planned to place $4 billion in bonds in the international markets between December 2009 and June next year. It is also planning to launch a sovereign wealth fund to invest its oil dollars abroad.
'It makes perfect sense for Angola to finally seek a credit rating as it will make it easier for it to sell its debt in international markets,' said Ricardo Gazel, a senior economist at the World Bank in Luanda.
Angola has relied on China for more than $5 billion in oil-backed loans since the end of its civil war in 2002, but has recently turned to the West to bolster its finances, in particular after the decline last year in world oil prices.
After years of wrangling with the International Monetary Fund, the U.S.-based institution said in September it was likely to grant Angola $1.3 billion in loans.
JP Morgan officials declined to comment.
S&P southern Africa managing director Konrad Reuss would not say whether the agency had been approached. However, he said the experience of other African nations suggested a sovereign rating could be issued within 6-8 weeks.
Other African countries with plans of varying degrees of maturity to issue international debt are likely to take a keen interest in the progress of the placement as a gauge of international demand for frontier market debt.
However, Angola's particular circumstances -- it has struggled to sell around $8 billion in domestic bonds this year -- does not mean the likes of Kenya, which has talked about a $500 million eurobond for more than two years, are likely to bring their plans forward, analysts said.
'Other countries are running slightly larger budget deficits but they've been raising more domestically and that's been able to substitute for any international borrowing,' said Stuart Culverhouse, economist at London-based brokerage Exotix.
Besides Kenya, Tanzania, Uganda, Zambia and various Nigerian states have expressed interest in issuing eurobonds, although those ambitions were put on ice by the credit crunch that set in a year ago.
To see African bonds factbox click on
(Additional reporting by Ed Cropley in Johannesburg; Editing by Ron Askew) Keywords: ANGOLA BONDS/ (Reuters messaging: henrique.almeida.reuters.com@reuters.net; email: henrique.almeida@reuters.com; tel 244 912 304 020) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LUANDA, Nov 5 (Reuters) - Oil-producing Angola will seek its first ever sovereign credit rating in a bid to improve its credibility abroad as it tries to sell $4 billion in bonds to foreign investors, its economy minister said on Thursday.
In a telephone interview with Reuters, Manuel Nunes Junior said JP Morgan had been appointed to lead the bond placement, but that talks with the main credit rating agencies had not yet begun.
'JP Morgan is the lead manager in the bond issue,' Nunes Junior said. 'We will also work to get a credit rating.'
A potential economic powerhouse in Africa, Angola has surpassed Nigeria to become the continent's biggest oil producer, but it does not have a credit rating, making it tougher to sell its debt abroad.
The government said on Wednesday it planned to place $4 billion in bonds in the international markets between December 2009 and June next year. It is also planning to launch a sovereign wealth fund to invest its oil dollars abroad.
'It makes perfect sense for Angola to finally seek a credit rating as it will make it easier for it to sell its debt in international markets,' said Ricardo Gazel, a senior economist at the World Bank in Luanda.
Angola has relied on China for more than $5 billion in oil-backed loans since the end of its civil war in 2002, but has recently turned to the West to bolster its finances, in particular after the decline last year in world oil prices.
After years of wrangling with the International Monetary Fund, the U.S.-based institution said in September it was likely to grant Angola $1.3 billion in loans.
JP Morgan officials declined to comment.
S&P southern Africa managing director Konrad Reuss would not say whether the agency had been approached. However, he said the experience of other African nations suggested a sovereign rating could be issued within 6-8 weeks.
Other African countries with plans of varying degrees of maturity to issue international debt are likely to take a keen interest in the progress of the placement as a gauge of international demand for frontier market debt.
However, Angola's particular circumstances -- it has struggled to sell around $8 billion in domestic bonds this year -- does not mean the likes of Kenya, which has talked about a $500 million eurobond for more than two years, are likely to bring their plans forward, analysts said.
'Other countries are running slightly larger budget deficits but they've been raising more domestically and that's been able to substitute for any international borrowing,' said Stuart Culverhouse, economist at London-based brokerage Exotix.
Besides Kenya, Tanzania, Uganda, Zambia and various Nigerian states have expressed interest in issuing eurobonds, although those ambitions were put on ice by the credit crunch that set in a year ago.
To see African bonds factbox click on
(Additional reporting by Ed Cropley in Johannesburg; Editing by Ron Askew) Keywords: ANGOLA BONDS/ (Reuters messaging: henrique.almeida.reuters.com@reuters.net; email: henrique.almeida@reuters.com; tel 244 912 304 020) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.