Category: Panama

Panama has bought back all its outstanding Brady bonds, taking advantage of a call option on July 17. The move to buy back the $351.6 million bonds in circulation not only makes economic sense – by lowering debt service costs – but it is also seen as a symbolic act of severing links with a period of past insolvency. The sovereign used a one-year $320 million bank loan to prepay most of the debt. Panama has followed other sovereign issuers in the region in its move to improve the country’s debt profile. Earlier this year Brazil announced its multi-billion dollar Brady buyback plan; Venezuela’s buyback was set at $3.9 billion and Colombia will spend $4.3 billion on repurchasing the paper this year.

Panama’s upper house, the Legislative Assembly has approved the project to expand the country’s historic canal and vital waterway, the first expansion since the Panama Canal was opened in 1914. The $5.25 billion project – of which around half will come from foreign financing – will now be put forward for public approval in a referendum. The plans to expand the Canal, to accommodate ships with greater capacity – so-called “post-Panamax” vessels – are not without their critics, who say the country will be overly indebted for work which is not essential.

Panama’s Grupo Financiero Continental has bought Banco Atlántico, owned by Spanish group Sabadell. The deal, reported to be worth more than $96 million, must still be approved by regulators. Grupo Financiero Continental has assets of $3 billion and is one of Panama’s most important financial institutions. Banco Atlántico has assets of just over $500 million.

Panamanian financial group Banistmo made its debt yesterday, Wednesday, on Latibex, the Madrid-based index of Latin American stocks. The share price rose 1.99% during the day to reach $40.6 but fell back to close at $40. Banistmo is the thirty-third company to be quoted on Latibex, and the first from Panama. It operates in Panama, Colombia, Honduras, Nicaragua, Costa Rica, El Salvador and the Bahamas.

Panamanian financial group Banistmo has applied to list on Latibex, the Madrid-based index of Latin American stocks. If accepted, it will become the thirty-third company to be quoted on Latibex, and the first from Panama. Banistmo operates in Panama, Colombia, Honduras, Nicaragua, Costa Rica, El Salvador and the Bahamas.

A Panamanian judge has ordered the arrest of former president of Nicaragua, Arnoldo Alemán, on charges of moneylaundering. Other family members, including his wife, have also been charged. Panama claims Alemán carried out the illegal activity via the Panamanian banking system to launder almost $60 million of public funds diverted to different bank accounts. Alemán, who governed Nicaragua between 1997 and 2002, has been under house arrest just south of the capital Managua after being convicted of embezzlement in Nicaragua in 2003.

Panama’s rate of inflation is trending upwards, according to the latest government figures. Consumer prices rose 1.1% in April, taking annual inflation through April to 1.4%. Year-on-year, inflation rose 2.9% in April. Last year, prices increased 2.9% over the year, above levels usually seen in the country.

Dominican financial group Centro Financiero BHD has applied to Panama’s banking authorities for a license to set up a subsidiary in that market. The bank would operate under the name BHD International Bank.

Panama’s public debt reached $10.6 billion as at the end of March, a rise of 5.8% year on year, according to the country’s ministry of economy and finance. The increase in the debt is a result of the country’s continuing deficit, a government spokesperson explained. Meantime, Panama’s public external debt rose to $7.9 billion.

Emerging markets energy company Globeleq, registered in Bermuda, has finalized the deal to buy controlling shares of El Paso Corporation in Panama and Dominican Republic. The deal includes a stake in Fortuna, a hydroelectric plant with a capacity of 300 MW and Pedregal, a 55 MW thermogenerator in Panama, as well as an increased stake in CEPP, a 65 MW thermogenerating plant in Dominican Republic. Globeleq is expected to make further acquisitions in the region later in the year. The company has energy plants in Bolivia, Peru, Guatemala, Nicaragua and Jamaica.