Arias, Fábrega & Fábrega advised Goldman Sachs & Co. and Citigroup Global Markets Inc. as joint dealer managers in connection with a modified Dutch auction for the Republic of Panama.

Holders of Panama's US$1.4 billion 7.25% Global Bonds due 2015 were invited to exchange those bonds for 6.7% US Dollar-Denominated Amortizing Global Bonds due 2036 issued by Panama plus cash.

The transaction successfully allowed Panama to purchase all its US$258 million aggregate principal amount of 2015 bonds submitted in non-competitive offers pursuant to the offer.  Panama will issue US$249 million aggregate principal amount of 2036 bonds in exchange.

Simultaneously, Panama accepted for purchase US$250 million aggregate principal amount of 2015 bonds, pursuant to the cash invitation.  Some US$500 million aggregate principal amount of 2015 bonds had been submitted in non-competitive offers, which have been accepted pro rata at a proration factor of 50%. 

Panama was also able to raise approximately US$400 million through an issuance of local Panamanian bonds. Altogether, Panama has been able to significantly reduce its exposure of US$1.4 billion for the 2015 bond to approximately US$521 million as a result of the combined exchange offer, cash invitation and local issuance.