Panama could return to international capital markets as part of an adjustment to its financing strategy, after the Cabinet Council authorized the Ministry of Economy and Finance to issue global bonds for up to US$6 billion.
On Monday, February 9th, the Ministry of Economy and Finance (MEF) announced in a press release the start of a debt buyback operation, while on the same day the Official Gazette published the authorization to issue up to US$6 billion in international bonds.
This decree, published in the Official Gazette, opens the door to new external placements while the government advances in an operation to buy back part of the existing debt in international bonds.
According to the Ministry of Economy and Finance, the buyback would be financed with resources from a possible new bond issue with approximate maturities of 8 and 12 years, subject to market conditions at the time of closing.
«The operation aims to order maturities and reduce the weight of financial commitments over time, as part of a liability management strategy. The ultimate objective is to reduce interest rates in the public and private sectors, attract local and foreign investment to create jobs and improve the population's quality of life,» the MEF stated in a press release.
This move marks a shift from the policy applied over the past year, a period during which Panama largely stayed out of traditional markets and prioritized financing through loans in different currencies and schemes backed by multilateral organizations.
