The Republic of Panama's $750 global bonds have recently been assigned a Ba1 rating from Moody's Investor Services and a BB+ from Standard and Poor's.

The transaction closed earlier this month and was led by J.P. Morgan and Morgan Stanley Dean Witter. The coupon rate is 9.625% with a maturity of February 8, 2011, and the spread is 468bp/T.

S&P also affirmed the BB+/B foreign currency sovereign credit rating on the republic.

According to S&P, the rating on the transaction reflects the duality of Panama's economy, a high public-sector debt burden, and the structure of public finances. Additionally, Standard & Poor's has said Panama's creditworthiness is backed by its monetary stability, a significant structural reform, and the establishment of democratic institutions following the end of the military-appointed governments in 1989.

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