Nov. 12 (Bloomberg) -- Panama may sell up to $2.5 billion of bonds and warrants overseas after a boost to the country’s debt-rating outlook put it on the cusp of investment grade, according to a filing with the U.S. Securities and Exchange Commission.

Standard & Poor’s raised the outlook to positive on Panama’s BB+ rating, which is one level below investment grade, on Nov. 9, citing the Central American country’s economic growth and the expansion of the Panama Canal.

Panama last sold bonds in international markets in March, when it issued $323 million in a reopening of 7.25 percent securities due in 2015. Latin American governments and companies are selling debt abroad as the global economic recovery fuels demand for the securities.

The extra yield investors demand to own Panama’s dollar bonds instead of U.S. Treasuries has narrowed to 1.88 percentage points from 5.40 percentage points on Dec. 31, according to JPMorgan Chase & Co.

To contact the reporter on this story: Veronica Espinosa in New York at vespinosa@bloomberg.net;

Last Updated: November 12, 2009 15:42 EST