Panama Sticks to Local Markets

Panama will stick to local bond markets next year to raise about $450m, says Mahesh Khemlani, the country’s deputy minister of finance. That amount is part of about $1.3bn in 2012 financing needs, which will largely be covered through multilaterals. “We are trying to develop the local markets,” adds Khemlani. “There are a lot of banks asking us for international issuance and we are trying to get those investors into the local markets.” The government has established a system for market makers and a global sub-custodian program to create more liquidity and allow international investors to participate in the domestic market. Panama recently retapped a 2018 bond locally, locking in a 3.57% yield. “I don’t think we would have achieved such a good rate in the international markets,” says Khemlani. The sovereign’s last cross-border sale was a JPY41.5bn ($502m) 2021 Samurai bond in January, and it has not issued in USD since 2009.