Panamanian Debt Declines on Failed Offering

Panamanian government bonds sank as much as 5.25% yesterday, after a failed attempt by a state-owned fund to sell $760 million.

Friday, December 18, 2009

The Fiduciary Fund for Development, an important buyer of Panamanian debt, tried to sell up to $760 million worth of sovereign bonds. This triggered a drop in prices, as investors grew concerned that a major source of demand would be removed. The Panamanian entity finally decided no to proceed with the sale.

From Bloomberg.com: "“It’s not a good time for them to be doing this,” said Cristina Panait, an emerging-markets strategist at Los Angeles- based Payden & Rygel, which manages $1 billion of emerging- market debt. “It’s negative. It created technical pressure on the bonds”".

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