PANAMA Law and Practice Contributed by: Kharla Aizpurúa Olmos, Mónica Moreno and Eduardo Oteiza, Morgan & Morgan
Morgan & Morgan Paseo del Mar Ave. 23rd Floor MMG Tower Costa del Este Panama City Panama Tel: +507 2657 777 Email: customerservice@morimor.com Web: www.morimor.com
1. Loan Market Overview 1.1 The Regulatory Environment and Economic Background
1.5 Banking and Finance Techniques In general, banking and finance techniques contin- ue to evolve to reflect the investor base and needs of borrowers through different Holdco structures to assist risk management and reporting concerns from the side of the borrowers and with strong collateral packages on the investor side that secure a flow of funds and revenues. 1.6 ESG/Sustainability-Linked Lending ESG and sustainability financing remain a top prior- ity and concern in the finance sector. Market trends show increased issuance of green bonds and financ- ing agreements with stricter ESG clauses, applicable not only to foreign investment but also to local invest- ment requirements, regardless of the project type. 2. Authorisation 2.1 Providing Financing to a Company Both banks and non-banks are generally authorised to finance companies incorporated under the laws of Panama. Local financial institutions that engage in “banking business” and accept public deposits must hold a general banking licence issued by the Super- intendence of Banks of Panama. Foreign banks are allowed to grant financing to companies organised under the laws of Panama. For non-banks, depending on the type of financing, there may be requirements and/or authorisation need- ed from the Superintendence of Securities Market of Panama.
The loan market’s direction and trends have been primarily influenced by the pursuit of new financ- ing options through foreign or local investment. This involves developing new financial products for the local market, often incorporating technology. Addi- tionally, the need for refinancing and debt restructur- ing in certain sectors, due to both the lingering effects caused by the COVID-19 pandemicand, in some cas- es, as a response to evolving regulatory or market pressures, has played a significant role. Finally, foreign investment is experiencing a resurgence, accompa- nied by a wave of new infrastructure projects that are underway or will be developed under the current administration. 1.2 Impact of Global Conflicts The primary impact has been an increase in interest rates, which, locally, is a direct result of the global situation and economic uncertainty surrounding tariff- related tensions. 1.3 The High-Yield Market To date, the high-yield market does not play a signifi- cant role in emerging trends, as it is not a common source of financing in Panama. 1.4 Alternative Credit Providers There has not been a significant growth in alternative credit providers.
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