International investors  show confidence in Panama with bond issues oversubscribed

The recent issuance of AES in Panama, which placed $1.38 billion in bonds at a rate of 4.375% and a term of 10 years.received offers for $5.5 billion from around the world, including $400 million from local investors.

The company, a subsidiary of the US AES Corporation, said it is the largest transaction in international markets made by a private entity in the Central American and Caribbean region. The operation was carried out jointly on the Panama Stock Exchange and the Singapore Exchange.

The issue is to refinance the debt that the company already has. “We have some maturities in the next few years and we wanted to do it now. It means bringing the debt to longer-term and better rates”, said Miguel Bolinaga, president of AES in Panama.

The AES issuance follows one carried on August 4 by Banco Nacional de Panamá for $1,000 million, with a maturity of 10 years and a rate of 2.5%, which reflects the support that the Republic gives to the state bank.

In this case, the demand almost five times the amount offered, reaching $4.8 billion.

“It is the largest issue and at the lowest rate obtained by a financial institution in the country,” said Javier Carrizo, general manager of BNP, when the issue closed.

On July 28, Banistmo had placed $ 400 million in the international market, in a transaction that had the participation of 120 investors from the United States, England, the European Union, and Asia.

Initially, the Panamanian bank, a Bancolombia subsidiary, went on the market with an issue of $300 million and received offers for $1.5 billion , so it raised the amount and placed $400 million.

To these issues is added the one made in March for $ 2.5 billion  by the Republic of Panama, the first time that a sovereign of Latin America went on the market since the coronavirus crisis  broke

Olga Cantillo, executive vice president, and general manager of the Panama Stock Exchange said that the results of the four issues convey the message that Panama is an attractive place for international investors.

“The investment grade of  Panama has very great strength. Panama continues to be positioned favorably” he said.

Financier Manuel Brea told  La Prensa that Panama continues to be among the safest loans in the region. The spread or differential that investors require to buy 30-year sovereign debt security from Panama is 116 basis points over a 30-year US bond