Panama launches one-day cash tender offer for 5.2% bonds due 2020

By Marisa Wong

Morgantown, W.Va., May 3 – Panama said it has begun an offer to purchase for cash any and all of its outstanding 5.2% global bonds due 2020.

The republic will purchase an amount of bonds such that the aggregate purchase price will not exceed the maximum purchase amount. The maximum purchase amount is expected to be announced on May 5, according to a press release.

As of May 3, there is $1.5 billion principal amount of the bonds outstanding.

The purchase price to be paid per $1,000 principal amount of bonds tendered and accepted for purchase will be $1,087.50.

Holders participating in the tender offer will also receive accrued interest up to but excluding the offer settlement date.

The tender period will begin at the open of market ET on May 4 and will expire at noon ET on May 4 for non-preferred tenders and at 4 p.m. ET on the same day for preferred tenders.

Panama expects to announce, along with the maximum purchase amount, the aggregate principal amount of preferred tenders and non-preferred tenders that have been accepted and whether any proration has occurred at or around 9 a.m. ET on Friday.

Settlement of the offer is slated for May 11.

During the tender period, a holder may place orders to tender bonds through the dealer managers of the tender offer. If a holder does not have an account with either of the dealer managers, orders may be placed through a broker, dealer, commercial bank, trust company, other financial institution or other custodian that has an account with one of the dealer managers. Holders will not be able to submit tenders through Euroclear Bank SA/NV, Clearstream Banking, societe anonyme or the Depository Trust Company.

The billing and delivering bank will consolidate all tender orders and accept bonds for purchase, subject to proration at or around 9 a.m. ET on Friday.

Holders will not have withdrawal rights with respect to any tenders after the expiration of the tender period.

The tender offer is conditioned on the pricing of an add-on issue of 2028 dollar-denominated bonds and a new issue of 2047 dollar-denominated bonds, which is expected to occur Thursday.

Panama may, but is not required to, issue and sell new bonds to holders who tender the 2020 bonds and place firm orders for new bonds during the tender period. Any new bonds issued to tendering holders will be consolidated and form a single series with, and be fully fungible with, the other new bonds of the same series issued and sold under the 2028 and 2047 bond offerings.

Bank of America Merrill Lynch. (attn.: debt advisory services, 646 855-8988 or 888 292-0070) and Morgan Stanley & Co. LLC (attn.: liability management, 800 624-1808 or 212 761-1057) are the dealer managers.

The billing and delivering bank for the tender offer is Merrill Lynch, Pierce, Fenner & Smith.

D.F. King &Co., Inc. (panama@dfking.com, 212 269-5550, 800 290-6428, www.dfking.com/panama) is the information agent.

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