Panama Launches Bond Tenders

Panama has launched a pair of liability management operations for creditors holding $1.47bn of outstanding global 7.250% 2015s, offering them in exchange either cash or 6.700% 2036 bonds. In the cash offer, the sovereign is offering holders a payment based on the 2015 US Treasury bond yield at the time of the January 24 close, plus a spread of 1.352%. In addition to this base price, the sovereign will pay a premium to be determined through a modified Dutch auction process. At the same time, Panama is offering holders 6.700% global 2036 bonds, at an exchange rate to be set on the closing day. Both offers expire January 24, and are contingent upon the issue of local Panamanian bonds or other financing. Citi and Goldman Sachs are managing the offers.