Posted by Tropiland Editor on March 25, 2010
Panama has joined the privileged group of Latin American countries ranked as investment grade, which includes Brazil, Mexico.
Fitch Ratings has upgraded the Republic of Panama’s long-term foreign currency and local currency Issuer Default Ratings (IDRs) to ‘BBB-’ from ‘BB+’. Both Rating Outlooks remain Positive. Fitch has also upgraded the short-term foreign currency IDR to ‘F3′ from ‘B’ and the country ceiling to ‘A-’ from ‘BBB+’.
The upgrades reflect a sustained improvement in public finances, underpinned by recent tax reforms, and the economy’s resilience to the global financial crisis and associated recession.
Although economic growth decelerated to 2.4% in 2009 from 10.7% in 2008, it was one of the strongest rates of growth in Latin America and among ‘BBB’ rated peers. Similarly, fiscal deterioration was moderate, especially by international standards while Panama’s general government debt/GDP ratio stabilized around 45%.
The Positive Outlook reflects the expectation that government debt/GDP ratio will further decline as the growth accelerates and fiscal discipline is maintained despite an ambitious public investment program.
Posted by Tropiland Editor on February 13, 2010
The 1 % deficit registered in 2009 for Panama’s economy ,placed the country in a “fast-track” way to achieve “investment grade” status from qualified risk agencies around the world.
Having attained this rating, the country might resort to other financing sources, new investors would be attracted and the development that the Martinelli administration has proposed would be more feasible.
This is another piece of good news for Panama amidst the global economic turn around that is slowly starting to emerge. Better investment rating would attract more investors willing to bring their money and developmental know-how into Panama.
However, I’ve said it before, here and on other blogs, that all these fancy ratings and theoretical assessments will not mean anything unless they are followed by meaningful, well-though and well laid-out plans and systems of long term cultural, economic and business shifts.
Posted by Tropiland Editor on February 2, 2010
An article by Alternative Latin Investor, published in the blog
CheapMommy, lists participants of the Central American market, their expectations, and the challenges and opportunities for private equity in the region.
The small economies of Central America dictate that small or regional investments are attracting the most private equity interest.
Mark Bishop from The Provident Group explains that: “the problem with Central America was and remains, very fragmented economies, small markets and lack of experience with legal transparency –it makes putting capital in there just much more difficult– there is going to be a couple of selective opportunities but its still a difficult market to get your arms round…We thought there was going to be a lot more consolidation regionally”.
The largest players in the industry is Aureos Capital, who manages over $200 million between three funds. “The majority of their investments are around the $5 million dollar mark and Erik Peterson Regional Managing Partner Aureos Latin America says they see greater regional integration as the key to their strategy ‘we have a strong preference for companies that have the potential to become regional players. As you know there is a lot of cross border activity within the region, which is one of the reasons why we have selected this region. There are free trade agreements enacted with the US and within these regions. And so you have quite a flow of capital say between Colombia, the south end of Peru and north end of Central America and Mexico going south into the Central American region’”.
Read the full article,
here.
