Panama poised for retap in 2020

Panama poised for retap in 2020

Bonds Debt Capital Markets Corporate & Sovereign Strategy Economy & Policy Fixed Income Panama Central America

Panama could reopen some of its bonds in 2020 or 2021 to raise money to redeem maturing notes, LatinFinance has heard.

The Central American issuer has sold nearly $3bn new notes this year, including $750m in 50-year bonds and $1.25bn in 2030s in mid-July, led by Citi and JPMorgan. Before that, Panama sold $1bn in its first Euroclearable notes in April.

"They don't need money right now," said Juan Delgado, the head of fixed-income trading at Global Bank in Panama City. "But once they need it, I see them doing a retap at very low interest rates."

Looking at Panama's yield curve, the government may choose to reopen its 2030 notes, which currently yield 3.16%, or its 2060 notes, which now pay 3.87%. In comparison, the country 10-year notes pay almost 10% and its 2047 notes yield 4.5%, Delgado said.

Panama has $1bn in bonds due in January 2020, which the government will likely settle with the money from the notes it sold last month. But in 2021, the country may have to return to the bond market to pay off $385m in yen-denominated bonds, Delgado said.

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