Panama Reopens Bonds, Tees Up Swap

Panama has launched a two-step liability management exercise. On Monday it reopened its 2015 bonds, and today the sovereign plans to reopen its 2029 vintage, offering the notes to holders of its 2011 and 2012 issues. The sovereign priced Monday $235m of the 7.25% 2015, at 109.564, to yield 5.533% or 10-year UST plus 158bp. The 2015s, which have an average life 6.8 years, closed Monday’s session at 110.350, according to people close to the trade. The reopening adds to the $913m outstanding and provides funds for general budgetary purposes. In a separate transaction launching today, Panama is offering to exchange existing 9.625% 2011 and 9.375% 2012 bonds for reopened 9.375% 2029s, in a bid to move investors to a more liquid point on its curve. The 2011 notes will be repurchased at a spread of 107bp over equivalent US treasuries, while the 2012s will be exchanged at a spread of 94bp. The 2011s bid Monday at around 112.75 (UST+ 110bp) and the 2012s at 116.8 (UST+ 162bp), according to a trader away from the deal. Up to $500m in 2029 bonds will be reopened at a spread of 168bp over UST due 2038. The 2029s bid Monday at 134.90 (UST+162bp), according to a trader away from the deal. Holders will also receive a cash payment for accrued interest. The offer is set to expire at 5:00pm New York time today. There are $500m in 2029s outstanding. Citi and Deutsche Bank managed the 2015 sale and are dealer managers for the exchange offer.