The 10-year Obrigacao do Tesouro Nao Reajustavel (OTNR) is the longest-dated fixed-rate domestic bond issued by the Republic of Angola. At an indicative yield of approximately 22.0%, it anchors the far end of the Kwanza-denominated sovereign yield curve and carries the highest nominal coupon in the OTNR complex. It also qualifies for the preferential 10% Imposto sobre a Aplicacao de Capitais (IAC) rate.

How the 10-Year OTNR Works

The 10-year OTNR is a fixed-rate, Kwanza-denominated government bond. The coupon rate – currently around 22.0% per annum – is set at issuance and remains unchanged for the entire decade. Semi-annual coupon payments (cupao semestral) of approximately 11.0% of face value are distributed every six months, with the full principal redeemed at maturity.

The Ministerio das Financas auctions 10-year OTNRs through the BNA. Authorized primary dealers (operadores de mercado primario) submit yield-based competitive bids, and the BNA accepts from lowest yield upward. Non-competitive bids at the weighted-average yield are also available. Settlement follows T+2 conventions through BODIVA’s Sistema de Liquidacao de Titulos, and all securities are held in dematerialized form at the Central de Valores Mobiliarios. The minimum investment is AOA 1,000.

Over the full ten-year term, an investor with AOA 1,000,000 in face value at a 22.0% coupon would collect twenty semi-annual payments of AOA 110,000 each – AOA 2,200,000 in gross coupon income – before the return of principal. After the 10% IAC withholding, net coupon income would total AOA 1,980,000, effectively doubling the original investment in coupon income alone (before principal redemption).

Current Market Context

With the BNA reference rate at 17.5% and headline inflation at approximately 15.7% (Instituto Nacional de Estatistica), the 10-year OTNR’s gross yield of 22.0% provides a 450-basis-point spread over the policy rate. The after-tax net yield of roughly 19.8% exceeds current inflation by more than 400 basis points. If disinflation trends continue, the real return profile of the 10-year OTNR could be among the most attractive in the domestic market.

However, the key risk is that inflation may not decline steadily over a decade-long horizon. Angola’s economy remains heavily dependent on oil exports, and commodity-price swings, fiscal dynamics, and exchange-rate pressures can all feed through to CPI. Locking in a nominal coupon for ten years means accepting substantial uncertainty about the real value of future cash flows.

Duration risk is the highest in the OTNR complex. A 100-basis-point parallel shift in yields would produce a price change of roughly 7–8%, making the 10-year OTNR the most volatile domestic sovereign bond on a mark-to-market basis. Auction demand has historically been the thinnest among OTNR tenors, with bid-to-cover ratios often between 1.3x and 1.8x.

Who Should Buy

The 10-year OTNR is primarily an instrument for institutional investors with long-dated Kwanza liabilities – pension funds, life-insurance companies, and sovereign wealth vehicles. These buyers value the high nominal coupon stream and the duration match against their obligations, and they are less concerned about interim mark-to-market volatility.

Retail investors should approach the 10-year with caution. The commitment horizon is long, secondary-market liquidity is limited, and the inflation risk embedded in a decade of fixed nominal payments is significant. For most individual investors, the 3-year or 5-year OTNR offers a better balance of yield, tax efficiency, and manageable duration. Investors seeking long-term sovereign exposure with currency protection should evaluate OTX FX-indexed bonds.

Tax Treatment

The Imposto sobre a Aplicacao de Capitais (IAC) applies at the preferential rate of 10% on coupon income. With twenty coupon payments over the life of the bond, the 5-percentage-point tax advantage relative to the 15% standard rate (applicable to treasury bills and the 2-year OTNR) compounds into a meaningful cumulative benefit. Tax is withheld at source on each semi-annual payment by the custodian bank. Investors should confirm whether capital gains on secondary-market sales are subject to additional taxation under current regulations.

Comparison to Alternatives

The step from the 7-year OTNR to the 10-year adds roughly 50 basis points in gross yield and about 40 basis points net, in exchange for three more years of inflation and duration exposure. The incremental compensation is modest relative to the additional risk. Angola’s Eurobond curve offers lower nominal yields but eliminates Kwanza depreciation risk, while OTX bonds provide a middle ground with FX indexation and local-market settlement.

How to Buy

1. Primary auction – Submit competitive or non-competitive bids through an authorized primary dealer ahead of the BNA auction deadline. Scheduled dates and indicative volumes appear in the quarterly calendario de emissoes.
2. Portal do Investidor – BODIVA’s online portal enables registered individuals to place non-competitive orders for new issuances and to trade on the secondary market.
3. Secondary market via BODIVA – Outstanding 10-year OTNRs trade on the mercado secundario. Liquidity at this tenor is the thinnest in the OTNR complex; investors should expect wider bid-ask spreads and potentially longer execution times compared to shorter-dated OTNR tenors.

A securities account (conta de titulos) at an authorized custodian bank and a valid Numero de Identificacao Fiscal (NIF) are required.