Panama Returns to Bond Markets After Two-Year Silence

By Rocco Caldero · February 18, 2026 · 2 min read

Key Points

— Panama sold $3 billion in global bonds — $1.49 billion maturing in 2034 and $1.49 billion in 2038 — in its first international debt issuance since President Mulino took office nearly two years ago

— Proceeds will fund a $2.97 billion buyback of older bonds, part of a liability management strategy after the government spent two years financing itself through bank loans from JPMorgan, Citigroup, and Santander

— Investors are watching for a decision by June on reopening the Cobre Panamá copper mine — a $10 billion operation that once contributed ~5% of GDP and whose 2023 closure triggered a Fitch downgrade to junk

Panama had not sold a single bond on international markets since President José Raúl Mulino took office in July 2024. Instead, the government authorized a $6 billion loan program, borrowing from JPMorgan Chase, Citigroup, and Banco Santander to plug budget gaps. On Monday, that silence ended. Panama sold $3 billion in dollar-denominated global bonds — $1.49 billion maturing 2034 and $1.49 billion due 2038 — at spreads of roughly 140 and 160 basis points over comparable U.S. Treasuries, tighter than initial guidance of 175 and 195.

Panama Returns to Bond Markets After Two-Year Silence. (Photo Internet reproduction)

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The proceeds fund a concurrent tender offer to retire older debt. Panama launched the buyback on February 9, accepted nearly $2.97 billion in old bonds, and will settle on February 23. The operation is textbook liability management: replace high-coupon legacy paper with new bonds at tighter spreads, extending maturities while reducing interest costs. BofA Securities and JPMorgan managed the deal.

Why the market opened

Two years ago, Panama was in crisis. The Supreme Court ordered the closure of the Cobre Panamá copper mine in November 2023 after massive street protests. The mine — a $10 billion First Quantum Minerals operation producing 350,000 tonnes of copper annually — contributed roughly 5% of GDP. Its shutdown prompted Fitch to strip investment grade in March 2024, cutting the rating to BB+. S&P downgraded to the lowest investment-grade notch in November 2024, and Moody’s shifted its outlook to negative that same month.

Mulino responded with spending cuts and improved revenue collection that gradually narrowed the deficit. Bond prices rallied through 2025, returning over 11%, partly because scarce supply drove prices higher. By Monday, spreads had tightened to less than two percentage points over Treasuries — the narrowest since 2020.

The copper question

The biggest variable remains Cobre Panamá. Mulino expects to announce a decision on the mine by June, with Chilean mining experts advising. First Quantum has suspended arbitration to allow negotiations, and the government has begun allowing stockpiled ore to be processed — a step short of reopening. Morgan Stanley analysts expect an agreement by decree, though a full restart may not come until early 2027. If the mine reopens, Panama regains 5% of GDP and a path back to investment grade. If it doesn’t, the $3 billion raised Monday buys time — but not answers. This is part of The Rio Times’ daily coverage of Latin American affairs and financial news.

Panama Returns to Bond Markets After Two-Year Silence

Daily Brief

Why the market opened

The copper question

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