Panama Rejects New Rules for Issuing Securities

Limiting the debt of an issuer and an obligation to rate emissions are two of the requirements proposed by the regulator which have not been well received by the Panamanian securities market.

Tuesday, November 8, 2016

The proposal by the Superintendency of the Securities Market was subject to public consultation, and now "... these comments must be analyzed and classified, and in the upcoming board meetings they will be evaluated in an objective way," said the head of the institution, Marelissa Quintero.

See "Panama: Risk Ratings for Securities Issues" reports that "...The criticism has come mainly from three fronts: in relation to the demands and conditions for a risk rating. Also because of the request for a certification regarding the level of total debt, individual or consolidated debt of the company, not exceeding 10 times its assets, including capital and reserves. And because of the model to be used for the presentation of the guarantees supporting each issue."

"... The Stock Exchange of Panama (BVP) and the Latin American Central Office of Securities cautioned that it seems that there does not seem to be any foundation to limiting the indebtedness of an issuer if there is a legal vehicle that a corporate group uses to channel financing to its subsidiaries, when that holding company provides effective financial support for the obligations."

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