Canal May Bypass Commercial Banks

The Panama Canal Authority (PCA) has received offers for multilateral debt that total more than the $2.25bn in debt financing it plans to seek to fund its expansion projects, according to a person familiar with the financing. This gives it the option of bypassing commercial bank loans, assuming the mega project stays on budget. The PCA has yet to make any firm decision, but has indicated it would like to wrap up the financing by the end of the year. It plans to pay for the remainder of the $5.25bn project using cash from revenues. Lenders have been awaiting greater definition of the authority’s plans, with the expectation that an international bank loan piece would be needed, along with local bond debt. The IFC and IDB have each offered $500m loans, with EIB and JBIC also heard as potential lenders.