Nov. 6 (Bloomberg) -- Angola, which vies with Nigeria as Africa’s biggest oil producer, is seeking to raise $4 billion in the sub-Saharan African region’s largest sale of bonds.

The debt will be sold in two parts in December and June next year, John Coulter, chief executive officer of JPMorgan Chase & Co.’s South African unit, which is managing the deal, said in a phone interview today.

Angola is seeking its first international bond sale after a slump in the oil price from last year’s record high triggered a budget deficit for the southwest African nation’s government, which gets about 80 percent of its revenue from crude. The nation’s currency, the kwanza, dropped more than 10 percent against the dollar last month after the central bank abandoned its currency peg.

“Debt issuance is still sparse in sub-Saharan Africa, so there’s natural demand for new issuers and for new benchmark bonds,” said Alex Garrard, a partner at BTG Asset Management U.K. LLP in London. “That said, $4 billion is a challenging number for a new borrower.”

The country has the equivalent of almost $2 billion of debt due over the next decade, including $1.7 billion of dollar- denominated securities sold in the domestic market, Bloomberg data show. The country doesn’t have credit ratings from Moody’s Investors Service, Standard & Poor’s or Fitch Ratings, according to Bloomberg data.

“It remains unclear whether the Angolan government will take steps to secure a credit rating prior to issuance, but this would clearly be important to establishing the credit as a mainstream benchmark for the region,” said Garrard.

Liquidity

Angola’s bond program may be affected by “a possible lack of liquidity, a problem affecting any issue coming from frontier markets,” Luis Costa, an emerging-markets debt strategist at Commerzbank AG in London, said in a telephone interview today.

Investors “might ask for hundreds of basis points extra” when compared with similar emerging-market assets because Angola doesn’t have a sovereign rating, he said. The country’s bond program “needs to be very well worked on,” said Costa.

Angola has approached agencies for a rating, Reuters reported yesterday, citing Economy Minister Manuel Nunes Junior. S&P, Fitch and Moody’s didn’t immediately respond to requests for comment. Angola’s Finance and Economy ministries declined to comment when contacted by Bloomberg News, and calls to the Angolan central bank were unanswered.

IMF Aid

Ghana was the first sub-Saharan African country to sell Eurobonds, raising $750 million in 2007. Nigeria suspended plans to issue its first bonds because of the credit crisis. South Africa raised $2 billion in a sale of 10-year bonds in May.

Angola faces slowing growth and inflation that reached 13.75 percent in August because of “higher food prices and continued supply bottlenecks,” the International Monetary Fund said in a Sept. 30 statement.

“After recording double-digit growth rates since 2004, the pace of growth has slowed,” the IMF said in its report. Falling oil revenue in the first half of 2009 “has shifted both the fiscal and current account positions into substantial deficit,” it said.

The IMF is preparing a “significant” 27-month standby loan for Angola due to be approved this month, IMF mission head Lamin Leigh said on Sept. 29.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.netEsteban Duarte in Madrid at eduarterubia@bloomberg.net

Last Updated: November 6, 2009 10:14 EST