LONDON: Wall Street Bank Citi expects Pakistan to reach an agreement with International Monetary Fund (IMF) for new four-year programme of up to $ 8 billion by end-July and recommends going long on country’s 2027 international bond.

“While longer-term challenges pertain, we see several positive catalysts supporting Eurobonds,” Nikola Apostolov at Citi wrote in note to clients. “First, larger and longer IMF Extended Fund Facility programme could be finalised by July-possibly $ 7-8 billion 4-year programme and secondly and possible inflow of Saudi investments,” Apostolov said after team from Citi visited Pakistan and met policymakers, including Finance Minister Muhammad Aurangzeb. Meanwhile, Citi said it expected Pakistan’s international 2027 bond to offer sweet spot to investors with sufficient liquidity and large upside as risks of default dissipate further. 2027 maturity trades at 87.292 cents in dollar, according to Tradeweb data.

Country’s shorter-dated bonds-maturing 2025 and 2026 are trading at 91-96 cents following sharp rally since late last year. Pakistan’s international bonds had sunken to as little as mid-20 cents in dollar in 2022.