Panama fights coronavirus in bond market

Panama fights coronavirus in bond market

Bonds Debt Capital Markets Fixed Income Economy & Policy Panama Central America United States Coronavirus

Panama said on Thursday that it sold $2.5 billion worth of sovereign bonds in the cross-border market, allowing the government to divert funds from the federal budget to combat the coronavirus.

In the first sovereign bond issue from Latin America since the outbreak began, Panama priced the 36-year notes with a coupon of 4.5% after orders surpassed three times the amount offered, the Ministry of Economy and Finance said in a press release.

Credit Suisse, HSBC and JPMorgan were the bookrunners on the deal, according to press reports.

"With these funds, we will secure additional resources to attack this health crisis," the ministry said. "We are aware that we ought to maintain fiscal discipline and ensure that the funds are administered in an agile way, but always prudently and progressively understanding the challenges we face."

The new issue's coupon is only slightly above the existing Panama 2053 bond which carries a 4.3% coupon. The 2053 bond was bid up two full points in price to 110.50, according to data from MarketAxesss via Refinitiv. The yield is currently 3.74%.