Panama offers new dollar-denominated 30-year amortizing global bonds in Dutch auction exchange

St. Louis, Jan. 10 - The Republic of Panama has begun an exchange offer in which it is offering new global bonds due 2036 for its existing global bond issues.

Outstanding securities covered by the offer include its:

• 10¾% dollar-denominated global bonds due 2020 (ISIN: US 698299AM62);

• 9 3/8% global bonds due 2023 (ISIN: US698299AS33);

• 8 7/8% dollar-denominated global bonds due 2027 (ISIN: US698299AD63);

• 9 3/8% dollar-denominated global bonds due 2029 (ISIN: US698299AK07); and

• 8 1/8% global bonds due 2034 (ISIN: US698299AT16).

Holders who participate in the exchange can either submit a minimum spread that they will accept or a non-competitive bid. Non-competitive bids will be accepted at the clearing level set in the auction.

Competitive bids will be accepted from highest downwards to the clearing spread. All holders whose bids are accepted will receive the clearing spread.

Bids will be accepted up to 4:30 p.m. ET on Jan. 17. At 9 a.m. ET on that day, Panama will announce the maximum clearing spread and the spread for the new bonds.

Each $1,000 principal amount of old bonds will be exchanged for $1,000 multiplied by the old bond exchange price divided by the new bond issuer price. Only whole numbers of new bonds will be issued, with fractions paid in cash.

Panama will also pay accrued interest on the old bonds up to but excluding the settlement date.

At 11 a.m. ET on Jan. 18, Panama will announce the actual clearing spread for each series of bonds accepted and also the rate on the benchmark U.S. Treasury due 2031 that will be used in setting pricing. It will also announce the principal amount of old bonds in each series that will be accepted in the exchange - a figure that could be zero - and the amount of new bonds to be issued, which could also be zero. In addition, it will disclose the coupon and issue price for the new bonds.

Settlement is scheduled for Jan. 26.

The new bonds will amortize in three equal installments beginning Jan. 26, 2034, with the final maturity on Jan. 26, 2036.

Provisions in the new bonds governing acceleration and future modifications are different to the existing bonds and most of Panama's current external debt, the country said in a news release. For the new securities, the payment provisions and some other terms can be amended with the consent of holders of 75% or more of the bonds.

D.F. King & Co., Inc. is information agent (banks and brokers call collect 212 269-5550, others call 800 290-6431). Citibank, NA is exchange agent (+44 20 7508 3867) and Dexia Banque Internationale à Luxembourg, SA is Luxembourg exchange agent.

Dealer managers are HSBC (866 898-6997 or call collect 212 525-5319) and JPMorgan (877 217-2484 or call collect 212 834-7306).

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