Panama Buys Back Bradies

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.