Panama issues $1 billion in debt bonds

The Panama Government issued another billion in debt bonds, a transaction approved by the Cabinet and published Wednesday, September 27, in the Official Gazette.

The funds will be used to “strengthen” this year’s budget. Also included is a reopening of bonds, in which, depending on the behavior of the market, the government hopes to raise another $200 to $300 million, according to the Minister of Economy and Finance, Héctor Alexander.

The series of issues will be made with a fixed coupon, their maturity will not be less than 10 years and they may be issued in dematerialized form or by macro-titles, according to the technical information of decree number 31 that authorized the issuance by Cabinet.

The bonds were registered with the Securities & Exchange Commission (SEC) of the United States, with the Bank Of New York Mellon as the fiscal agent for payment, registration, and transfer.

The decree also authorizes the MEF to negotiate derivative instruments to “optimize the cost/risk balance of the public debt portfolio,” leaving the ministers and vice ministers of that portfolio the power to negotiate and coordinate the final terms of the contracts, bonds, issues, subscriptions and the hiring of intermediaries for payment, repurchase and transfers that emanate from said issues.

Alexander said that he met with the banks to organize the issue, which also contemplates the reopening of bonds.

He reaffirmed that the issuance is part of the strategy to secure funds for the cash flow required for the operation and financing of public investments.

Strategically, the minister confirmed that they have also done pre-funding to take the temperature of the market in order to improve liability management.