LIMA, Oct 9 (IFR) - Panama has embarked on a series of non-deal roadshows as it readies an up to US$1bn international bond next year and seeks to lure more foreigners into its domestic market.
The government has already visited accounts in the US, Europe and Japan and hopes to soon head to the Middle East, Katyuska Correa de Jimenez, the country’s head of public credit, told IFR on the sidelines of the IMF meetings in Lima on Friday.
The idea is to broaden the Central American country’s funding base and encourage more international investors to buy local treasury notes - a market that has been Euroclearable since 2014.
The move is part of a broader strategy to deepen the treasury and local debt markets and please the rating agencies which have put a clear emphasis on such developments.
Just US$400m of the US$3.5bn in outstanding local Panamanian treasuries are in foreign hands despite the fact that they are Euroclearable and trade some 50bp-60bp wide to the country’s global bonds.
This comes as the government awaits congressional approval of its 2016 budget which includes some US$2.5bn in external and internal debt financing.
About US$2bn of that amount is expected to be split between domestic and international bond offerings, with the remaining likely coming from multilateral institutions.
Timing of the international bond will depend on market conditions, though it is expected to come in the first half, given that amortization payments spike in March and June. “Volatility is too high (at the moment),” said Correa. (Reporting by Paul Kilby; Editing by Davide Scigliuzzo)