EXCLUSIVE-Angola extends $1 billion debt facility with JPMorgan and gets extra $500 million

By Miguel Gomes and Duncan Miriri

LUANDA, Jan 13 (Reuters) - Angola has extended a one-year $1 billion debt facility with JPMorgan JPM.N for three years and secured an extra $500 million in financing, its finance ministry said on Tuesday.

The new three-year contract carries an interest rate "within 8%", the ministry told Reuters. The finance ministry said the rate on the original facility was just below 9%.

Angola and JPMorgan agreed to the initial one-year derivative contract, known as a Total Return Swap, in 2024. JPMorgan declined to comment.

Angola's bond prices extended earlier gains after the news of the extension, with the 2048 maturity trading 1 cent higher at 86.97 cents on the dollar.

"News of a three-year transaction and an additional $500 million of financing will be well received by the market," said Samir Gadio, head of Africa strategy at Standard Chartered in London.

The Southern African oil producer and the Wall Street lender agreed to the original deal with the backing of $1.9 billion in Angolan government bonds issued to serve as collateral.

In April, the bank issued a margin call forcing Angola to post an additional $200 million in collateral after the value of those bonds fell past a trigger point when sweeping U.S. trade tariffs roiled markets, exposing the risks that come with such deals for frontier issuers.

Angola later recouped the added collateral when its bond prices rebounded.

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Several other emerging economies - including Senegal, Gabon and Cameroon - have also opted for so-called "off-screen " deals such as private placements in an effort to optimise debt and manage repayments.

Angola's debt-to-GDP ratio stood at 70% in 2024, and finance ministry officials said investors' perception of the country's risk did not match its ability to repay.

Officials also said the JPMorgan deal worked well for them - allowing the government to avoid adding Eurobond debt to its books when borrowing costs were elevated.

The finance ministry on Tuesday said it was also planning to issue fresh 7- and 10-year domestic bonds denominated in local and foreign currencies.