SOURCE: Republic of Panama

Republic of Panama

January 25, 2012 16:58 ET

Panama Announces Preliminary Results of Its Cash Invitation

PANAMA CITY, PANAMA--(Marketwire - Jan 25, 2012) - The Republic of Panama ("Panama") announced today the preliminary results of its previously announced cash invitation (the "Cash Invitation") to eligible holders of its 7.250% Global Bonds due 2015 (ISIN: US698299AU88; CUSIP: 698299AU8; Common Code: 020635525) (the "2015 Bonds") to submit, in a modified Dutch auction, offers to sell the 2015 Bonds for cash. The Cash Invitation expired yesterday (January 24, 2012), as scheduled.

Pursuant to the terms of the Cash Invitation, for each U.S.$1,000 principal amount of 2015 Bonds, Panama has determined, in its sole discretion, that the Clearing Cash Premium will be zero, and that the resulting Clearing Price will be equal to the previously announced Base Purchase Price of U.S.$1,166.98.

Approximately U.S.$500 million aggregate principal amount of the 2015 Bonds have been submitted in noncompetitive offers, which, if accepted, will be subject to proration. The preliminary proration factor is 50.0%. No competitive offers will be accepted. Accordingly, none of the 2015 Bonds submitted with an Offer Premium above zero will be accepted for purchase.

Panama expects to purchase approximately U.S.$250 million aggregate principal amount of the 2015 Bonds pursuant to the Cash Invitation, subject to the satisfaction or waiver of the Financing Condition (as defined below).

In addition to the Clearing Price, holders of the 2015 Bonds sold pursuant to the Cash Invitation will receive accrued and unpaid interest during the period from the most recent interest payment date to but excluding the actual Settlement Date.

The terms and conditions of the Cash Invitation are set forth in the cash invitation document dated January 17, 2012 (the "Invitation Document"). Capitalized terms used but not defined in this notice are defined in the Invitation Document.

Panama priced an issue of local Panamanian bonds today. Due to high demand at a premium deemed to be very favorable by Panama, Panama determined to accept an aggregate amount of bids for the local Panamanian bonds exceeding the previously announced maximum amount of U.S.$300 million. Bids aggregating U.S.$400 million have been accepted, subject to settlement on January 30, 2012. The higher aggregate amount has enabled Panama to increase the estimated proration percentage of bonds accepted in the Cash Invitation. The settlement of this issuance of local Panamanian bonds or another financing, in either case, satisfactory to Panama, is referred to as the "Financing Condition", which may be waived by Panama in its sole discretion.

At or around 5:00 P.M., New York City time, on January 30, 2012, or as soon thereafter as practicable, Panama will announce whether the Financing Condition has been satisfied or waived and, accordingly, whether it will complete the purchase of 2015 Bonds pursuant to the Cash Invitation.

The settlement date for the 2015 Bonds sold pursuant to the Cash Invitation is expected to be February 1, 2012 (the "Settlement Date").

Copies of the Invitation Document may be obtained free of charge by eligible participants from the Information and Tender Agent by visiting the Cash Invitation website at www.bondcom.com/panama.

Information and Tender Agent

The information and tender agent for the Cash Invitation is Bondholder Communications Group, LLC.

Bondholder Communications Group, LLC is located at 30 Broad St., 46th Floor, New York, NY 10004 (Attention: Ramona Peters). Bondholder Communications Group, LLC can be reached at the following numbers: 1-888-385-2663 (toll free); +1-212-809-2663 (call collect).

Joint Dealer Managers

Goldman, Sachs & Co. and Citigroup Global Markets Inc. are acting as Joint Dealer Managers for the Cash Invitation.

Goldman, Sachs & Co. can be reached by telephone at the following numbers: +1-800-828-3182 (toll free); +1-212-902-5183 (call collect).

Citigroup Global Markets Inc. can be reached by telephone at the following numbers: +1-800-558-3745 (toll free); +1-212-723-6108 (call collect).