PANAMA
PANAMA 8.12 04/28/2034
Pricing & Performance
Bond Structure
Credit Ratings
Macro Health Radar
Debt & Fiscal Metrics
Growth & Monetary
International Reserves & External Position
Key Ratios Comparison (% of GDP / Revenue)
Credit Commentary
PANAMA (US698299BT07)
Credit Rating: S&P BBB- Stable (downgraded from BBB, Nov 2024), Moody's Baa1 Stable, Fitch BB+ Stable (downgraded from BBB-, June 2024)
Credit Momentum: Negative - Fiscal Deterioration. Panama suffered dual downgrades (S&P Nov 2024: BBB→BBB-, Fitch June 2024: BBB-→BB+) following persistent fiscal deficits and rising debt. Despite Panama Canal generating $3B+ annual revenues (2.8% GDP transferred to Treasury), fiscal discipline deteriorated: deficit widening to 6-7% GDP, debt rising toward 70% GDP from 40% pre-pandemic, current account deficit persisting 8-9% GDP. Political dysfunction contributing - Congress blocking reforms, populism driving spending, corruption scandals undermining confidence.
Canal Competitive Advantage: Panama Canal remains world's most strategic maritime chokepoint handling 5% global trade, 50%+ market share NE Asia-US East Coast routes. Recent drought (2023-2024) challenged operations but normalized water levels restored capacity. $5.3B expansion (completed 2016) accommodates Neo-Panamax vessels but competition emerging (Nicaragua canal proposals, Suez alternatives, transshipment routes). Canal Authority maintains exceptional credit quality (A3/BBB+ ratings 2-4 notches above sovereign) demonstrating operational excellence independent of government dysfunction.
Overall Assessment: Panama represents deteriorating LatAm investment-grade credit with fiscal indiscipline squandering Canal advantages. BBB-/Baa1/BB+ ratings reflect: (1) Canal strategic asset generating fiscal revenues; (2) dollarized economy providing monetary stability; (3) regional financial center (banking, logistics); BUT constrained by: (1) persistent fiscal deficits; (2) rising debt trajectory; (3) political dysfunction; (4) corruption concerns; (5) current account deficits. Recommended underweight - fiscal deterioration disappointing given Canal windfalls. S&P Negative outlook warns further downgrade possible if fiscal consolidation fails. Better LatAm investment-grade: Chile (A- superior), Peru (Baa1 less fiscal pressure), Uruguay (BBB/Baa1/BBB- smaller but stable). Panama suitable only if betting on fiscal reform forcing function from rating pressure - political will questionable.
Bond Market Map — Duration vs Yield
Other Panama Sovereign Bonds (17)
| Bond | Coupon | Maturity | Ccy | Price | YTM | Dur | Z-Spread |
|---|---|---|---|---|---|---|---|
| PANAMA 7.88 03/01/2057 | 7.875% | 2057-03-01 | USD | 119.91 | 6.491% | 12.45 | 183 |
| PANAMA 6.85 03/28/2054 | 6.853% | 2054-03-28 | USD | 107.20 | 6.401% | 12.43 | 174 |
| PANAMA 4.5 04/16/2050 | 4.5% | 2050-04-16 | USD | 79.66 | 6.263% | 12.66 | 159 |
| PANAMA 4.5 04/01/2056 | 4.5% | 2056-04-01 | USD | 77.63 | 6.262% | 13.84 | 149 |
| PANAMA 4.3 04/29/2053 | 4.3% | 2053-04-29 | USD | 76.70 | 6.155% | 13.43 | 142 |
| PANAMA 4.5 05/15/2047 | 4.5% | 2047-05-15 | USD | 82.30 | 6.122% | 11.68 | 153 |
| PANAMA 8 03/01/2038 | 8% | 2038-03-01 | USD | 118.16 | 5.941% | 7.70 | 173 |
| PANAMA 5.66 02/23/2038 | 5.662% | 2038-02-23 | USD | 99.20 | 5.841% | 7.97 | 160 |
| PANAMA 6.88 01/31/2036 | 6.875% | 2036-01-31 | USD | 109.63 | 5.661% | 6.92 | 153 |
| PANAMA 6.4 02/14/2035 | 6.4% | 2035-02-14 | USD | 106.56 | 5.527% | 6.52 | 143 |
| PANAMA 6.7 01/26/2036 | 6.7% | 2036-01-26 | USD | 108.83 | 5.492% | 6.42 | 141 |
| PANAMA 5.23 02/23/2034 | 5.227% | 2034-02-23 | USD | 99.22 | 5.427% | 5.83 | 140 |
| PANAMA 3.3 01/19/2033 | 3.298% | 2033-01-19 | USD | 89.41 | 5.241% | 5.72 | 122 |
| PANAMA 2.25 09/29/2032 | 2.252% | 2032-09-29 | USD | 84.43 | 5.181% | 5.69 | 117 |
| PANAMA 7.5 03/01/2031 | 7.5% | 2031-03-01 | USD | 111.60 | 4.859% | 3.99 | 99 |
| PANAMA 3.16 01/23/2030 | 3.16% | 2030-01-23 | USD | 94.88 | 4.711% | 3.39 | 88 |
| PANAMA 9.38 04/01/2029 | 9.375% | 2029-04-01 | USD | 113.16 | 4.621% | 2.55 | 83 |