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Panama Sells
$323 Million Bond Amid Market Rally
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Panama Sells
$323 Million Bond Amid Market Rally
(Bloomberg) - Panama sold $323 million of
dollar bonds maturing in 2015 in
international markets, seeking to take
advantage of a rally in emerging-market
debt.
The notes priced at 101 cents on the dollar
to yield 7.04 percent, according to
Bloomberg data. The sale was a reopening of
7.25 percent bonds the government first sold
in 2004 and brought the total amount of
notes outstanding to $1.47 billion.
Emerging-market bonds have rallied since
March 6, with the extra yield investors
demand to own developing nation debt instead
of Treasuries shrinking 57 basis points to
6.38 percentage points. Panama is tapping
foreign debt markets as it seeks to shore up
economic growth with a $1.1 billion stimulus
package.
“We’ve had a few days of rally and some
issuers are trying to take advantage of this
opportunity,” said Cristina Panait, an
emerging-market strategist at Los
Angeles-based Payden & Rygel, which manages
more than $50 billion. “Reopening an
existing issue makes sense for Panama, given
its bonds are less liquid.”
Panama’s debt sale comes after Mexico,
Brazil and Colombia sold dollar bonds in the
past two months as slumping commodity prices
curbed economic growth.
Morgan Stanley and UBS AG managed the sale.
Yields Rise
Panama will use the bond sale proceeds to
help finance its budget for this year, the
finance ministry said in a statement.
The yield on Panama’s 2015 bonds climbed 25
basis points, or 0.25 percentage point, to
6.84 percent at 4:52 p.m. in New York,
according to JPMorgan Chase & Co. The bond’s
price dropped 1.25 cents on the dollar, the
most since Jan. 16, to 102 cents.
Panama is rated Ba1 by Moody’s Investors
Service and BB+ by Standard & Poor’s. Both
ratings are one level below investment
grade.
President Martin Torrijos said in January
that his government will offer $1.1 billion
in credit to unfreeze lending and stimulate
the economy. Panama’s economy expanded 9.2
percent last year, less than the 11.5
percent growth in 2007, according to the
country’s comptroller general. The global
slowdown curbed exports and construction in
the final three months of 2008.
The UBS Bloomberg Constant Maturity
Commodity Index has fallen 50 percent from a
July record.
ING Financial Bank NV forecasts
emerging-market dollar debt sales will rise
as much as 68 percent this year to a
four-year high of $65 billion. |
