Backing Given to Investing in Panama

JPMorgan Chase says that "the real economic consequences of this (Panama Papers) fiasco are not going to be all that severe," and recommended buying Panamanian sovereign bonds.

Wednesday, July 13, 2016

The investment bank JPMorgan Chase believes that all of the factors that have sustained economic growth in Panama are still present, and if Panamanian sovereign  bonds have underperformed this year as a result of greater aversion to risk after the Panama Papers scandal, then investors should "buy Panama".

The report by JPMorgan Chase reported on by, indicates that "... Negative headlines triggered by the so-called Panama papers scandal earlier this year may have created an opportunity to buy the Central American nation’s sovereign bonds".

In this context, the Directorate of Public Financing at the Ministry of Economy and Finance (MEF) announced the repurchase of up to $300 million from a Treasury Note maturing in 2018. The planned buyback date is July 26 and the settlement date is 29 July.

The statement from the ministry went on to say that investors holding these securities may decide to accept the government's offer and receive their investment and their yields or wait for the bond to mature in 2018.

More on this topic

Panama Issues $125 million in Bond Debt

March 2017

The government has issued on the local market $125 million in Treasury Bonds maturing in 2024, with an average yield of 3.63%.

From a statement issued by the Ministry of Economy and Finance:  

On March 14, the Republic of Panama issued Treasury Bonds maturing in 2024 with a 4.95% coupon, in line with the debt strategy adopted by the Government. 

Fiscal Deficit Takes a Toll on Costa Rica

September 2014

The risk premium demanded by investors for the Costa Rican international bond due in 2023 rose from 2.10% to 2.56% between June and September 2014.

Investors could be moving towards a degradation of the sovereign rating of the country, a possibility already suggested by Fitch rating agency.

El Salvador Pays 2 Percentage Points More

November 2009

The country will have to pay an interest rate of 7.37% for $800 million in bonds sold today, whereas Panama will only have to pay 5.22% for $1 billion issued this week.

Three days ago, Moody's downgraded El Salvador's sovereign debt from Baa3 to Ba1, with a negative outlook.

Panama Could Sell Debt for up to $2.5 Billion

November 2009

According to a filing with the U.S. Securities and Exchanges Commission, the Canal country could sell up to $2.5 billion in bonds and warrants.

This decision could be motivated by a recent improvement in Panama's rating on behalf of Standard & Poors, who raised its investment rating outlook to "Positive", putting the country on the cusp of investment grade.

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