EM LATAM CREDIT: Panama Copper Mine Preservation: Neutral Take
Republic of Panama (PANAMA; Baa3neg/BBB-/BB+)
"Panama Mining | Government announces preservation plan and assures it is not a reopening" - La Estrella, Panama
Following up on our previous note regarding the Canadian based miner First Quantum, the government has authorized the company to begin implementing a 49 page plan made available February 2025 to preserve the copper mine.
The Ministry of the environment will oversee how the stored material is safely extracted for export while the Ministry of Commerce as well as eight other institutions will be involved in the process, according to La Estrella. The extraction will reportedly take three to six months due to environmental concerns.
To put this in context, the government wants to reopen the mine as it used to contribute 5% of GDP, revenue which is badly needed now to close a widening fiscal deficit, but also wants broad political acceptance to do so as the mine was closed in 2023 after mass civil unrest.
President Jose Mulino believes he can decide to open the mine unilaterally after comprehensive environmental studies are completed. How the partnership will be structured with First Quantum and the economics of the copper concentrate to be exported still remain unknown.
Panama 10-yr notes were last quoted T+278bps, 24bps tighter QTD and 36bps tighter YTD.
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FOREX: EURUSD Pressing Fresh Weekly Lows, Breaching S-T Trendline Support
- Broad single currency weakness playing out in the aftermath of month-end, prompting EURUSD to press fresh weekly lows below 1.1330. In the process, EURUSD is testing below a short-term trendline with multiple touches (hourly chart attached).
- While the recent pullback in EURUSD is considered corrective and the bullish trend structure is unchanged for now, the pair’s ability to gain traction above 1.14 this week appears a relatively bearish development at the margin. A break of the April 23 low at 1.1308 would focus the market on key support at the 20-day EMA (1.1251), of which a break would signal scope for a deeper corrective pullback towards 1.1144 initially.
- Despite the weaker equity benchmarks, the likes of EURAUD and EURCAD are underperforming, both down ~0.6% on the session. Notably, EURJPY has had a near 100 pip pullback to print a new session low by one pip at 161.71. This narrows the gap to the first EURJPY support at 161.43, the 50-day EMA.
PIPELINE: Corporate Bond Update: $2B IADB Priced
- Date $MM Issuer (Priced *, Launch #)
- 04/30 $2B *IADB 5Y SOFR+44
- 04/30 $1.25B *Nordic Investment Bank 5Y SOFR+43
- 04/30 $1B *CoE Dev Bank 3Y SOFR+36
- 04/30 $850M #Uzbekneftgaz 5Y 8.75%
- 04/30 $Benchmark BNP Paribas 4NC3 +150a, 4NC3 SOFR, 6NC5 +160a
- 04/30 $Benchmark Bahrain 12Y 7.5%, 8Y Sukuk 6.25%
FED: US TSY 17W BILL AUCTION: HIGH 4.190%(ALLOT 96.76%)
- US TSY 17W BILL AUCTION: HIGH 4.190%(ALLOT 96.76%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 33.90% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 2.78% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 63.32% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 3.08
