Coupon Payment Schedule and Tracker
Coupon payments represent the periodic interest income earned by holders of Angola’s treasury bonds (OTs). Unlike Bilhetes do Tesouro (BTs), which are zero-coupon discount instruments, OTNRs and OTX bonds pay fixed semi-annual or annual coupons. Tracking these payment dates is essential for income-focused investors and for managing reinvestment decisions.
How Coupon Payments Work
When MINFIN issues an OTNR or OTX bond, the coupon rate and payment frequency are fixed at issuance. Key mechanics include:
- Payment frequency — Most OTNRs pay coupons semi-annually (every 6 months from the issue date). Some OTX series may pay annually.
- Day count convention — Angola government bonds typically use an Actual/365 day count convention.
- Payment agent — Coupon payments are processed through CEVAMA (the central securities depository) and credited directly to the bondholder’s registered account.
- Record date — Bondholders must be registered owners in CEVAMA as of the record date (typically 2-3 business days before the payment date) to receive the coupon.
Coupon Rates by Instrument Type
| Instrument | Typical Coupon Range | Payment Frequency | Currency |
|---|---|---|---|
| OTNR 2-year | 18-19% | Semi-annual | AOA |
| OTNR 3-year | 19-20% | Semi-annual | AOA |
| OTNR 5-year | 20-21% | Semi-annual | AOA |
| OTNR 7-year | 20-21% | Semi-annual | AOA |
| OTNR 10-year | 21-22% | Semi-annual | AOA |
| OTX USD-indexed | 7-9% | Semi-annual | AOA (USD-indexed) |
| OTX EUR-indexed | 6-8% | Semi-annual | AOA (EUR-indexed) |
Coupon rates reflect indicative ranges based on recent issuances. Actual rates vary by series.
Tax on Coupon Income
Coupon payments are subject to the Imposto sobre Aplicacao de Capitais (IAC), Angola’s withholding tax on investment income:
- Standard IAC rate: 15% on coupon payments
- Reduced rate: 10% for bonds with original maturity exceeding 3 years
- Withholding: IAC is withheld at source by CEVAMA before the net coupon is credited to the bondholder’s account
For a complete treatment of bond taxation, see the tax guide.
Reinvestment Considerations
In a high-yield environment where OTNR coupons range from 18% to 22%, reinvestment of coupon income is a material driver of total returns. Key considerations include:
- Reinvestment risk — If the BNA cuts its policy rate (currently 17.5%), future reinvestment of coupon proceeds will occur at lower yields, reducing the effective compound return.
- Reinvestment channels — Coupon income can be reinvested into new BT or OT issues through the primary market or Portal do Investidor. The weekly BT auction cycle provides frequent opportunities to redeploy cash.
- Compounding frequency — A semi-annual coupon of 20% produces an effective annual yield of approximately 21% if reinvested at the same rate, illustrating the importance of prompt reinvestment.
- Ladder approach — The bond ladder strategy structures maturities and coupon dates to produce a regular income stream while managing reinvestment risk across the cycle.
Tracking Your Coupon Schedule
Investors holding multiple bond series should maintain a calendar of upcoming coupon dates. Information sources include:
- CEVAMA account statements — Detail coupon payment dates and amounts for each registered holding.
- BODIVA bond fact sheets — Provide the coupon schedule for each listed series.
- MINFIN issuance records — The original auction announcement for each series specifies the coupon rate and payment dates.
For investors focused on maximizing income, the income strategy guide provides a framework for constructing a portfolio optimized for coupon cash flows.