Angola Eurobonds surged in Tuesday trading after news of a tentative 3-year debt relief deal reached with its biggest creditor nation China.
Yields on the Eurobonds due 2025 experienced a massive intraday jump to 12 percent from 14 percent as prices rose on the news.
Angola said June 1 it was in talks with lenders to reprofile some of its debt. Chinese lenders account for 45 percent of the nation’s external debt, or $22.4 billion at the end of last year, according to data from the central bank.
Angola is Africa’s second-biggest oil exporter and the government is trying to tackle its debt load as crude prices hurt revenues and are set to cause a fourth straight year of economic contraction.
A deal among oil-producing nations to cut output from last month also makes it difficult for Angola to repay its loans to Chinese banks using shipments of the fuel.