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Analyst from leading Global Rating Agency asserts "Expansion Project should have long-term, positive impact"

Date: 11-SEP-2006

SAYS EXPANSION WOULD NOT AFFECT PANAMA'S RISK LEVEL   

PANAMA CITY, Panama, September 11, 2006 – At a recent forum in Panama, sponsored by newspaper Capital Financiero, Fitch Ratings analyst Erick Campos said: “If handled appropriately, the Panama Canal expansion project should have a long-term, positive economic impact." Fitch said that the money needed for the Canal expansion would not affect Panama's risk rating as long as fiscal consolidation and strong economic growth continues. Moreover, Campos declared that if it were to assign the Panama Canal Authority (ACP) a credit rating, it could be higher than BB+, which is Panama’s present credit rating.

At this juncture, the ACP is not obtaining a credit rating and has not hired a credit rating agency. Investment ratings provide investors with a financial picture of a company’s or a sovereign government’s financial health, taking into consideration its management, debt levels, finances, and other similar criteria. It is a metric that measures investment risk.

The Panama Canal expansion proposal would build a new lane of traffic along the Panama Canal that would double capacity and allow more traffic. The project is estimated to cost $5.25 billion and would be paid entirely by users of the Canal through a graduated system of toll increases. According to the Panamanian Constitution (Title XVI, Article 320) and Law No. 28 (July 17, 2006) of the National Assembly, the Panamanian government will not guarantee the ACP’s debt for the Panama Canal expansion.

Fitch Ratings is a leading global rating agency dual-headquartered in New York and London committed to providing the world's credit markets with independent, timely and prospective credit opinions. Fitch Ratings currently maintains coverage of 3,100 financial institutions, including 1,600 banks and 1,400 insurance companies.

About the Panama Canal Authority
The Panama Canal Authority is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the Panama Canal Authority is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the Panama Canal Authority's Web site: www.pancanal.com.

The Authority's responsibility to the Panamanian people is paramount. The Canal belongs to the people and benefits from the Canal should accrue to as many Panamanians as possible. The Authority will plan its future so that it will continually contribute to the economic development and welfare of the citizens of Panama.


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