Fitch Rates Panama's USD1.25 Billion Global Bonds 2025 'BBB'

NEW YORK--()--Fitch Ratings has assigned a 'BBB' rating to Panama's USD1.25 billion global bond issuance maturing March 16, 2025. The bonds have a coupon rate of 3.75%.

The proceeds will be used for general budgetary purposes and liability management transactions.

KEY RATING DRIVERS

Panama's ratings are underpinned by the continued outperformance of its dynamic and diversified service-based economy. Fitch forecasts that growth will average 6% in 2014 - 2016, the highest rate in the 'BBB' category, supported by the Panama Canal expansion and its spillovers into other logistics activities, continued public investment and positive prospects for mining, energy and tourism.

These structural strengths are balanced against a relatively narrow and volatile tax revenue base, weak fiscal policy credibility as a result of repeated deviations from budget deficit targets, and high dependence on external financing. Panama ranks below peers in governance indicators of rule of law and control of corruption, issues that have weighed on government effectiveness and contributed to fiscal slippage.

RATING SENSITIVITIES

The rating would be sensitive to any changes in Panama's long-term foreign currency Issuer Default Rating (IDR). Fitch affirmed Panama's long-term foreign currency IDR at 'BBB' with a Stable Outlook on February 19th, 2015.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Sovereign Rating Methodology' (Aug. 12, 2014);

--'Country Ceilings' (Aug. 28, 2014).

Applicable Criteria and Related Research:

Sovereign Rating Methodology -- Effective 15 Aug 2011 to 13 Aug 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648978

Country Ceilings

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=752194

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=981210

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Todd Martinez
Associate Director
+1-212-908-0897
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Shelly Shetty
Senior Director
+1-212-908-0324
or
Committee Chairperson
Tony Stringer
Senior Director
+44 203 530 1219
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings, Inc.
Primary Analyst
Todd Martinez
Associate Director
+1-212-908-0897
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Shelly Shetty
Senior Director
+1-212-908-0324
or
Committee Chairperson
Tony Stringer
Senior Director
+44 203 530 1219
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com