Early repayment of IMF loans to require another bond issue

Last week's 15-year Greek government bond issue was successful, but not quite good enough for the state to immediately repay another section of the loans from the International Monetary Fund early.

That was because the issue's 1.91 percent interest rate was above the floating rate of the rest of the IMF loan, at 1.8 percent. Given that the European Stability Mechanism (ESM) has set raising funds on the market at a lower interest rate than that of the loan to be repaid as a condition for the approval of repaying Fund loans early, it is not yet time for the next IMF repayment.

Still, planning provides for this to happen at some point later in the year and to concern the loans maturing in 2021, adding up to 1.9 billion euros. In November Athens paid back 2.7 billion euros, leaving another 5.5 billion due.

The last tranche of the IMF loans is scheduled to be repaid...