Obrigacoes do Tesouro Nao Reajustaveis (OTNRs) are fixed-rate, Kwanza-denominated government bonds issued by the Ministerio das Financas through the Banco Nacional de Angola (BNA). They form the backbone of Angola’s domestic sovereign yield curve from the 2-year point outward, offering predictable nominal coupon payments in exchange for duration and inflation risk.
What Makes OTNRs Distinct
The designation nao reajustaveis (“non-readjustable”) means the coupon rate is fixed at issuance and does not adjust for inflation or exchange-rate movements over the life of the bond. This distinguishes OTNRs from OTX bonds, which are indexed to foreign currencies and whose Kwanza-equivalent payments fluctuate with the exchange rate.
Because OTNR coupons are locked in nominal terms, investors bear the full weight of inflation risk. With headline CPI currently running at approximately 15.7% according to the Instituto Nacional de Estatistica, and the BNA policy rate at 17.5%, the real return on OTNRs depends heavily on the trajectory of inflation over the holding period. If disinflation continues, real returns improve; if inflation re-accelerates, the fixed coupon erodes in purchasing-power terms.
Available Tenors
OTNRs are issued across five standard maturities, each auctioned on a regular schedule:
| Tenor | Indicative Yield | Coupon Frequency | IAC Tax Rate |
|---|---|---|---|
| 2-Year | ~20.0% | Semi-annual | 15% |
| 3-Year | ~20.5% | Semi-annual | 10% |
| 5-Year | ~21.0% | Semi-annual | 10% |
| 7-Year | ~21.5% | Semi-annual | 10% |
| 10-Year | ~22.0% | Semi-annual | 10% |
The minimum investment across all tenors is AOA 1,000, and all coupons are paid semi-annually (cupao semestral) based on a 360-day count convention.
How OTNRs Work
OTNRs are coupon-bearing bonds. Investors purchase the bond at auction (or on the secondary market) and receive fixed semi-annual interest payments plus the return of principal at maturity. Unlike treasury bills, which are zero-coupon discount instruments, OTNRs generate periodic cash flow throughout the holding period.
Issuance takes place through the same competitive auction infrastructure used for BTs. Primary dealers submit yield-based bids, and the BNA determines a cut-off yield. Non-competitive bids at the weighted-average yield are also accepted. Settlement is T+2 for bonds (compared to T+1 for bills), and all OTNRs are held in dematerialized form at the Central de Valores Mobiliarios.
Tax Treatment
The Imposto sobre a Aplicacao de Capitais (IAC) applies to coupon income. OTNRs with an original maturity of three years or less are taxed at the standard 15% rate. Bonds with maturities exceeding three years – the 3-year, 5-year, 7-year, and 10-year OTNRs – benefit from a reduced IAC rate of 10%, an incentive designed to encourage longer-duration investment in Kwanza-denominated sovereign debt. Tax is withheld at source on each coupon payment.
Who Should Buy
OTNRs are appropriate for investors who want higher yields than treasury bills provide and are willing to accept multi-year duration exposure. Pension funds, insurance companies, and banks with long-dated Kwanza liabilities are natural buyers. Retail investors with a longer time horizon and a view that inflation will decline can also benefit, particularly from the tax-advantaged tenors beyond three years.
Investors who are concerned about Kwanza depreciation may prefer FX-indexed OTX bonds instead, which adjust for exchange-rate movements.
How to Buy
- Primary auction – Submit bids through an authorized primary dealer during the BNA auction window. The quarterly calendario de emissoes specifies dates and indicative volumes.
- Portal do Investidor – BODIVA’s online platform provides retail investors with non-competitive access to new issuances and secondary-market trading.
- Secondary market via BODIVA – Outstanding OTNRs trade on the mercado secundario. Liquidity varies by tenor: the 2-year and 3-year are the most actively traded, while the 7-year and 10-year may carry wider bid-ask spreads.
A securities account (conta de titulos) and a taxpayer identification number (Numero de Identificacao Fiscal, or NIF) are required for participation. For the latest auction results, consult the BNA or BODIVA platforms.