Moody's: Greece's early repayment of IMF loans is credit positive
Greece's early repayment of loans from the International Monetary Fund will improve its credit outlook, since it will cut spending on interest and lengthen its debt-maturity profile, the ratings agency Moody's said on Thursday.
IMF loans account for 2.6 percent of Greek public debt, but they carry interest rates significantly higher than the interest on loans from its euro zone creditors and its recent bond sales.
Also, IMF loans have a much shorter maturity than the loans Greece got from the European Financial Stability Fund (EFSF) and the European Stability Mechanism (ESM) to stay afloat during its debt crisis.
Greece plans to repay 3.7 billion euros owed to the IMF this year and next. The interest rate on the loans is 5.13 percent, compared with an average 1.4 percent on EFSF and ESM funding or the 3.45 percent on its recently issued five-year bond and 3.875...