For Immediate Release
WASHINGTON, D.C. -The United States today re-affirmed its strong commitment to the people of Tunisia and their democratic transition by signing a sovereign loan guarantee agreement with the Tunisian government.
The loan guarantee will help the Government of Tunisia access international private capital and strengthen its capacity to manage the transition to an economically sound and prosperous democracy. The guarantee will make it easier for the Government of Tunisia to borrow money from international markets so that it can provide critical services to its citizens such as vocational and technical training, higher education, and programs that help banks provide financing to small businesses.
"I am honored to be signing this agreement today with Ambassador Tekaya," said Mara Rudman, Assistant Administrator for the Middle East Bureau at the United States Agency for International Development. "Coming on the heels of Secretary Clinton's May 17 acknowledgement of the $100 million Cash Transfer Agreement between our two countries, this loan guarantee agreement represents the continued strong commitment of the American government and people to the success of Tunisia's transition."
The amount of the Tunisian bond to be guaranteed by the United States has not yet been determined, but is expected to be more than $400 million for a 7-year bond. This will be the first international bond Tunisia has issued since 2007 and could be an inflection point in Tunisia's access to and integration in global capital markets. Final terms, pricing, and the face amount of the bond will be determined at official entry into force of the agreement and shortly before the financial closing, which is expected to be in June or July.
The U.S. Congress authorized the use of up to $30 million in to provide this loan guarantee facility for Tunisia. The signing of this loan guarantee agreement fulfills the commitment made by Treasury Secretary Tim Geithner and Tunisian Finance Minister Houcine Dimassi on April 20, 2012, when they signed a declaration of intent to proceed as quickly as possible on a loan guarantee agreement that would allow Tunisia to move forward with a debt issuance. The U.S. loan guarantee for Tunisia is also an example of how the Deauville Partnership with Arab Countries in Transition has helped transitioning countries reintegrate into international capital markets under reasonable financing terms to fill their sizable financing gaps and to allow their enterprises to invest in job-creating projects.
"We look forward to continuing to work with the Tunisian government and people as they lay the groundwork for a future of economic prosperity that empowers women and youth, strengthens civil society, and solidifies the foundations of democracy," said Ambassador William B. Taylor, Special Coordinator for Middle East Transitions at the U.S. Department of State.
Last updated: February 21, 2014