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UPDATE 2-VTB in talks with Angola for further $2 bln financing
October 31, 2012 / 2:26 PM / 5 years ago

UPDATE 2-VTB in talks with Angola for further $2 bln financing

* CEO says bank ready to help Angola raise further funds

* Format for $2 bln financing yet to be decided

* VTB raised $1 bln financing for Angola in August (adds CEO comment on format of financing)

By Shrikesh Laxmidas

LISBON, Oct 31 (Reuters) - Russia’s second-largest bank, VTB , is ready to help the Angolan government raise $2 billion in financing after providing a loan of $1 billion earlier this year, chief executive Andrei Kostin told Reuters on Wednesday.

“We have already arranged financing for the government, and are ready to help raise another $2 billion for the Angolan economy,” Kostin said in a telephone interview from Luanda, where he met President Jose Eduardo dos Santos.

In August, the Russian group’s investment banking arm raised $1 billion for oil-rich Angola through a private placement of 7-year paper.

“This could be done in the same format as the previous operation or through another form of financing, the matter is yet to be discussed,” he added.

The debt raised in August carried a yield of 7 percent and was issued by a special purpose vehicle backed by VTB, but the ultimate risk was with the Angolan government, ratings agency Moody’s said at the time.

Banking sources also said at the time the deal could pave the way for a Eurobond issuance. Angola has floated the idea several times in the last few years but the sale has not gone ahead. (Editing by Ed Cropley and Jon Herskovitz; editing by Ron Askew)

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