NEW YORK, May 6 (Reuters) - Panama's eurobonds rose on Monday, a day after former security minister Jose Raul Mulino won a presidential poll and said his government would be pro-investment and pro-business and that the Central American country would honor its debts.
The country's so called "country risk" index, the bond spread to U.S. Treasuries measured by the EMBI global diversified index, tightened 11 bps to 252 bps, on track to close at its most narrow since late October.
Bonds maturing this month were trading near par before the weekend and remained near 99.9 cents on the dollar, while the 2050 bond was among the largest gainers, up 3.375 cents to trade at 67.335 cents.
"Although the need for economic reform is imminent, the new administration's ability to take necessary action will only be known post-election, and contingent on the administration’s ability to form alliances in congress," Citi analysts said in a Monday note.
Panama's business-friendly reputation has been tarnished by a decision to close the Cobre Panama copper mine that directly and indirectly accounts for about 4.5% of the country's total output.
"There is speculation about reopening the mine, which we think unlikely given strong social opposition and what we perceive as strong legal constraints," JPMorgan analysts said in a client note.
The Panama Canal's contribution to state coffers is expected to fall nearly 3% this year given lower volumes on the back of a drought. (Reporting by Rodrigo Campos; editing by Jonathan Oatis)
