Moody's assigns ratings to Panama's Treasury bill and note programmes

Moody's Ratings has assigned a (P)P-3 rating to Panama's Treasury bill programme and a (P)Baa3 rating to its Treasury note programme, the Ministry of Economy and Finance said. Both ratings are investment grade and derive from Panama's long-term sovereign rating of Baa3, according to the ministry. The local market programmes had not previously carried their own rating, although the Republic itself was rated.

The ministry said international participation in Treasury bills and notes rose 35% between August 2024 and September 2026, with holdings increasing from $974m to $1,312m. As of 30 September 2026, international custodians held between 39.5% and 51.2% of the balance of series placed in August and September 2026.

The international base has also diversified, the ministry said. Besides investors participating through the Euroclear link, the central securities depositories of Costa Rica, El Salvador, Guatemala and Nicaragua held $32.0m in Treasury bills and notes as of 30 September 2026, compared with $0.3m in August 2024.

According to the ministry, many international institutional investors, including investment funds, asset managers and insurers, may only buy instruments that carry a risk rating, so the absence of ratings on the local programmes had limited their participation. With the Moody's ratings, the ministry said, Treasury bills and notes can be considered by a wider group of investors, which it said supports more competitive demand at auctions, a deeper local yield curve and a lower financing cost for the state.

The ministry said an April 2026 reduction mainly reflected the maturity of the 2026 Note, which was paid to its holders, and not sales by international investors. It said international participation varies between auctions but that the two most recent placements recorded the highest levels of the past year.

Economy and Finance Minister Felipe Chapman said the growing presence of international investors in the local market was a sign of confidence in Panama, and that rated Treasury bills and notes allow the market to be opened to more investors, strengthen demand at each auction and continue reducing the state's financing cost.

The ministry described Treasury bills as short-term instruments placed through periodic auctions, generally at 12 months, and Treasury notes as medium-term instruments with a term and coupon defined at each auction. It said both programmes are supported by market makers, which contribute to liquidity in the secondary market.