Arias, Fábrega & Fábrega acted as Panamanian transaction counsel to Deutsche Bank and Global Bank Corporation, the second largest bank of Panamanian capital, in the structuring of a US$500 million covered bond programme for Global Bank, its first-ever transaction of this nature.

Additionally, Global Bank issued US$200 million of the structured covered bonds under its US$500 million residential mortgage loans covered bond programme. Because there is no covered bond law in Panama, Global Bank will issue these bonds by transferring the mortgage pool to a guarantee trust with HSBC Investment Corp., a subsidiary of HSBC Bank (Panama) S.A. (BBB-/Positive/A-3).

Global Bank is liable to make payments when due on the covered bonds. Global Bank's obligations under the covered bonds are direct, unconditional, and unsubordinated obligations, primarily secured by cash flows from mortgages granted by the issuer in Panama.

This is the first covered bond programme from Panama. The deal shows the strength of the covered bond structure for emerging market issuers, largely due to structural enhancements that helped raise the rating into investment grade territory.