Panama Fund Sells Down 2027 Holdings

Panama says the government-backed Fondo Fiduciario para el Desarrollo has sold off its holdings of sovereign-issued 8.875% coupon 2027 notes. The 2027 position went for $441m, having been acquired for $362m, it claims. The sale resulted in a capital gain of $78.2m for the fund, says the government in a statement. In December, the fund attempted to sell all of its global Panama bond holdings, which then amounted to $760m, but pulled the transaction after receiving low bids. The clumsy maneuver led RBS analysts to suggest Panama’s curve might become subject to a supply-risk premium. The fund’s strategy has been to purchase bonds in the open market at depressed levels and held them with an eye to resell them at higher values, says Panama.