Panama Issues $1.3 Billion in the International Market

Bonds of $300 million maturing in 2030 and $1,000 million maturing in 2053 were issued at rates of 2.83% and 3.60%, respectively.

Wednesday, November 20, 2019

This is the second issue so far of Laurentino Cortizo's administration, since in mid-July the country issued $2 billion in the global market.

From the MEF statement:

November 19, 2019. The Republic of Panama today entered the international capital markets through the reopening of the Global Bonds maturing in 2030 and 2053, as part of the financing plan for fiscal year 2020, which includes the amortization of the Global Bond 2020 maturing in January.

The amount awarded was US$1.3 billion, with US$300 million issued in Bono 2030 and US$1 billion in Bono 2053.

Thanks to the robustness of the order book, receiving offers over US$3,000 million, the Republic was able to issue Bono 2030 at a spread on the reference instrument of the United States of America (UST) of 105 basic points and Bono 2053 at a margin of 135 basic points.
This allowed for historically low yields of 2.83% by 2030 and 3.60% by 2053.

The positive results in the transaction reflect investor confidence in the macroeconomic fundamentals and credit profile of the Republic of Panama, at a time when economic challenges exist in most Latin American countries.

The Vice President of the Republic, José Gabriel Carrizo, said that the issuance of bonds today, is a sign of the "confidence of capital markets that look positively on the projection and management of the administration of President Laurentino Cortizo. This motivates us to continue working in this direction, being transparent, accountable and being in permanent and close contact with people."

On the other hand, the Minister of Economy and Finance, Hector Alexander, emphasized that he has a specialized team that monitors the capital market and takes advantage of the best time to make bond issues. "Today's issue was successful, the US$1.3 billion was issued at a lower interest rate than that obtained in the historical issuance of US$2 billion last July," he said.

"With this money the country will attend the bonds maturing in January 2020, which total about US$1.2 billion, an operation we call prefunding. At the same time, we are pleased with the operation because the market perceives us as a compliant country," said Minister Alexander.

More on this topic

Costa Rica Issues $325 Million in Debt

February 2021

During the auction held on February 1, 2021, the placement of domestic debt securities in local currency amounted to the equivalent of $210 million and in dollars to $115 million.

Through this mechanism, ¢129,667 million ($210.5 million) in Domestic Debt Securities Fixed Rate Colones and Sovereign Adjustable Real Domestic Debt Securities were allocated, informed the Ministry of Finance.

No More Investor Confidence?

August 2019

Although the goal for this year was to issue $100 million in debt bonds, during the first quarter the Nicaraguan government only awarded $1.1 million, doubting the level of investor confidence.

According to the "Public Debt Report, First Quarter 2019", prepared by the Central Bank of Nicaragua, from January to March regarding Investment Securities in dollars, 1.03 million was issued at an average rate of 5.31% and an average term of 7 months.

Panama Issues $2 Billion in the International Market

July 2019

For the business sector, the issuance of $2 billion in bonds by the government is positive, since "it allowed the country to quote, for the first time in history, a bond for more than 20 years with an interest rate below 4%.

On July 17, the Panamanian government was able to issue bonds for $1.25 billion with a 3.160% interest rate and maturity in 10 years (2030), and others for $750 million with a 3.870% rate and maturity in 40 years (2060).

Dominican Republic Raises $1.3 billion from Bonds

July 2018

The government of the Caribbean country issued $1.3 billion in the international market for a term of 10 years and an interest rate of 6%.

This is the second issue that the Dominican Republic has made in the international market, as in the month of February it issued $1 billion for a term of 30 years and a rate of 6.5%, and another of $822 million for a 5 year term and a rate of 8.9%.

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