TREATIES AND OTHER INTERNATIONAL ACTS SERIES 13-1026

________________________________________________________________________

LOAN GUARANTEE ASSISTANCE

Agreement Between the 

UNITED STATES OF AMERICA

and JORDAN

Signed at Amman August 14, 2013 
 NOTE BY THE DEPARTMENT OF STATE

 Pursuant to Public Law 89—497, approved July 8, 1966

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued

under the authority of the Secretary of State shall be competent

evidence . . . of the treaties, international agreements other than

treaties, and proclamations by the President of such treaties and

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime

jurisdiction, and in all the tribunals and public offices of the

United States, and of the several States, without any further proof

or authentication thereof.”
 JORDAN

 Loan Guarantee Assistance

 Agreement signed at Amman August 14, 2013;

 Entered into force October 26, 2013.
LOAN GUARANTEE AGREEMENT

BETWEEN

THE UNITED STATES OF AMERICA

AND

THE HASHEMITE KINGDOM OF JORDAN

This Agreement ("Agreement") is between the United States of America

(the "United States Government") and the Hashemite Kingdom of Jordan

("Jordan" or the "Borrower") (together "the Parties").

ARTICLE I. Purpose 

Section 1.01. Purpose. The United States Government, acting through

the United States Agency for International Development ("USAID"), plans to

provide guarantees ("Loan Guarantees" or "Guarantees") for certain payment

obligations with regard to new debt that Jordan is expected to incur. This

guarantee assistance program intends to reinforce Jordan's economic reform

program, as supported by the IMF and USAID, support Jordan's continued

access to the capital markets, and provide external financing to Jordan at

affordable rates. The purpose of this Agreement is to set forth the rights and

obligations of the Parties with respect to the guarantee assistance program

described herein.

ARTICLE II. The Guarantee

Section 2.01. Guarantee Obligations. Subject to the terms herein,

USAID shall issue guarantees with respect to the payment obligations of the

Borrower for Eligible Notes (as defined in Section 2.02 below). The

Guarantees will guarantee one hundred percent (100%) of the Borrower's

repayment of principal under Eligible Notes in an amount not to exceed an

aggregate principal amount of one billion two hundred and fifty million United

States Dollars (U.S. $1,250,000,000) together with interest due thereon, for a

period up to seven (7) years from the date of issuance.
The Guarantees shall be issued in accordance with Title III of the

Department of State, Foreign Operations, and Related Programs

Appropriations Act, 2012 (Div. I, P.L. 112-74), as applied to FY 2013 funding

by section 1706(j) of the Further Continuing Appropriations Act, 2013 (Div. F,

P.L. 113-6) ("the Act"). Such guarantees constitute, as a matter of domestic

U.S. law, obligations of the United States of America, and the full faith and

credit of the United States of America is pledged for the full payment and

performance of such guarantee obligations. The Standard Terms and

Conditions of the Guarantees issued hereunder shall be mutually agreed upon

and shall be published by the United States Government in Title 22, Chapter II,

of the United States Code of Federal Regulations for the benefit of the holders

of Eligible Notes as defined in Section 2.02 ("Noteholders").

Section 2.02. Eligible Notes and Terms. "Eligible Notes" are United

States Dollar-denominated notes or bonds issued by the Borrower: (a) for the

purposes of this Agreement, (b) purchased by "Eligible Underwriters," as

defined in Section 2.03, and (c) under such terms and conditions, documents

and agreements as are in form and substance mutually agreed upon by USAID,

the Eligible Underwriters and the Borrower, including, without limitation,

offering circulars, note purchase or underwriting agreements, global notes and

a fiscal agency agreement (such agreements in their final definitive

documentation being referred to herein as the "Debt Agreements").

Except as otherwise agreed in writing, Eligible Notes shall have a term or

maturity of seven (7) years with interest paid on a regular basis and principal

paid at maturity.

Section 2.03. Eligible Underwriters. Except as otherwise agreed in

writing, "Eligible Underwriters" are those institutions that: (a) purchase

Eligible Notes directly from the Borrower with a view toward distribution to

investors, (b) maintain a principal place of business in the United States and

are subject to regulation under the laws of the United States (including

registration as a broker-dealer under the Securities Exchange Act of 1934, as

amended, and membership in the Financial Industry Regulatory Authority),

and (c) are financially capable of serving as an underwriter for the issuance of

Eligible Notes.

Section 2.04. Installments. Except as otherwise agreed in writing,

Eligible Notes and the Guarantees issued hereunder shall each be made in one

(1) installment.
Section 2.05. Final Date for Borrowing. The Guarantees shall be issued

at the same time as the issuance of the Eligible Notes (the "Closing Date") and

shall be evidenced on the reverse side of the global notes evidencing the

Eligible Notes. Unless otherwise agreed by the Parties in writing, the final

date for the Closing Date (and for the issuance of a Guarantee under this

Agreement) shall be thirty (30) days after the entry into force of this

Agreement as set out in Section 7.01, and the final date to request the issuance

of Guarantees under this Agreement shall be ten (10) days before the Closing

Date.

ARTICLE III. Fiscal Agent

Section 3.01. Fiscal Agent. The fiscal agent for the Borrower shall be

approved by USAID and shall perform its duties pursuant to the terms of a

fiscal agency agreement that is agreed to by the Borrower, the fiscal agent and

USAID. The costs for such services shall be paid by the Borrower and may be

paid from the proceeds of the Eligible Notes made available at the Closing

Date.

ARTICLE IV. Conditions Precedent

Section 4.01. Borrower's Conditions Precedent.

(a) Procedural Requirements and Documentation. No later than ten

(10) days prior to the Closing Date and except as otherwise

agreed by USAID in writing, the Borrower shall deliver, in form

and substance satisfactory to USAID, the following:

(i) a legal opinion from the Jordanian Minister of Justice

attesting to the validity and enforceability of the Debt

Agreements and related agreements, if any, and stating that

such agreements have been duly authorized, executed and

delivered and constitute legal, valid and binding obligations

of the Borrower;

(ii) all documents required by the terms of the Debt

Agreements and any related agreements to satisfy the

conditions precedent therein;

(iii) the duly completed and signed Certificate and Request for

Issuance of Guarantees in the form of Annex I;

(iv) a statement of the name of the person holding the office

specified in Section 6.06 and of any additional
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representatives, together with a specimen signature of each

person so designated; and

(v) such other documents and representations as USAID may

reasonably request with respect to the transactions

contemplated by this Agreement.

(b) Additional Conditions. Additional conditions precedent to the

issuance of any Guarantees are attached as Annex II. The United

States Government shall determine whether the conditions have

been satisfied consistent with Annex II.

Section 4.02. United States Government's Conditions Precedent. On or

prior to the issuance of the Guarantees, USAID shall deliver, in form and

substance satisfactory to the Borrower and/or the Eligible Underwriters, such

documents, certificates and opinions as may be reasonably required by the

Debt Agreements.

Section 4.03. Satisfaction of Conditions Precedent and Notification.

The issuance of the Guarantees shall be subject to the satisfaction of the

conditions precedent set forth in Sections 4.01 and 4.02 above.

ARTICLE V. Special Covenants 

Section 5.01. Reimbursement and Subrogation. The Borrower agrees

that if USAID makes any payment on the Borrower's behalf to or for the

benefit of the Noteholders pursuant to the Guarantees, whether or not the

Noteholders have applied to USAID for such payment and whether or not an

event of default has occurred under the terms of a Debt Agreement, the

Borrower shall promptly reimburse USAID for such payment. USAID shall

promptly inform the Borrower of any such payment. In the event of a default,

by operation of this Agreement and any existing applicable common law rights

as may exist, USAID shall become subrogated to all the rights of the

Noteholders against the Borrower.

Section 5.02. Late Payment Charge. In the event of a late payment of

amounts due USAID, either directly or by way of reimbursement for amounts

USAID has paid on behalf of the Borrower, a late payment charge shall accrue

on all such amounts. This late payment charge shall accrue to USAID under

the same terms and conditions as late payment charges due the Noteholders as

such charges, if any, are prescribed in the Eligible Notes.

Section 5.03. Use of Proceeds. The Borrower shall not use the proceeds

from the issuance of Eligible Notes for military or paramilitary purposes.
ARTICLE VI. General Provisions

Section 6.01. Consultation. The Parties shall cooperate to assure that the

purpose of this Agreement will be accomplished. With respect to matters

relating to the selection of Eligible Underwriters, the issuance of Eligible Notes,

the Debt Agreements and related matters, the Parties shall consult through

their representatives identified in Section 6.06. The Parties shall settle any

issues that arise from the interpretation or implementation of this Agreement

through consultations and negotiations through diplomatic channels.

Section 6.02. Reports, Books and Records, Audit and Review. The

Borrower shall:

(a) furnish to the United States Government such information and

reports relating to the Eligible Notes, the Debt Agreements, the Guarantees and

this Agreement as may be reasonably requested.

(b) maintain, in accordance with generally accepted accounting

principles and practices consistently applied in Jordan, books and records

relating to the Eligible Notes, the Debt Agreements, and this Agreement. Such

books and records shall be reviewed by the Jordanian Audit Bureau to the extent

provided in the applicable laws of Jordan and shall be maintained for a

minimum of three years after the Eligible Notes have been fully repaid by the

Borrower.

(c) afford authorized representatives of the United States

Government the opportunity at all reasonable times to review such books, records

and other documents described in this section.

Section 6.03. Other Payments. The Borrower affirms that no payments or

other benefits have been received and agrees that none will be received by any

official of the Borrower in connection with the procurement of goods or

services financed under the Eligible Notes except fees, taxes or similar

payments legally required in the territory of the Borrower.

Section 6.04. Remedies. If the United States Government determines

that the terms of this Agreement have been breached or that the conditions

precedent for issuing Guarantees set forth in this Agreement or any annex

hereto are not satisfied, the United States Government may suspend or

terminate the issuance of Guarantees not yet issued after providing notice to the

Borrower, taking into account the Parties' preference for resolving any issues

through diplomatic efforts. The issuance of any Guarantee by USAID, the

payment by USAID to the Noteholders of any amounts pursuant to any
Guarantee, the delay or failure of USAID to make any claim for payment, or

the delay or failure of USAID to give its written approval to any acceleration of

debt by the Noteholders (if such a right of acceleration is provided for in the

Eligible Notes) shall not operate as a waiver by USAID of any rights accruing

to USAID under this Agreement, the Debt Agreement or any Guarantee.

Section 6.05. Implementation Letters. USAID may from time to time

issue Implementation Letters further describing applicable procedures

concerning its implementation of this Agreement, or recording the agreement of

the Parties on details of implementation of this Agreement.

Section 6.06. Representatives.

(a) For purposes relevant to the immediate implementation of the

technical and financial aspects of this Agreement, up to and including the

issuance of the Eligible Notes, the Borrower shall be represented by the

Secretary General of the Ministry of Finance of Jordan indicated in section

6.07.

(b) For purposes relevant to the ongoing management of the technical

and financial aspects of this Agreement, including the ongoing management of

Borrower's obligations under the Eligible Notes, the Borrower shall be

represented by the Secretary General of the Ministry of Finance of Jordan

indicated in section 6.07.

(c) The United States Government shall be represented in all regards

relating to the implementation of this Agreement by the individual holding or

acting in the office of Director, Office of Development Credit, USAID.

(d) Each Party, by written notice, may designate additional

representatives. Either Party may accept as authorized any instrument signed

by such representatives of the other Party in implementation of this Agreement,

until receipt of written notice of revocation of their authority.

Section 6.07. Communications. Any notice, request, document or other

communication submitted by either Party to the other Party under this

Agreement shall be in writing or by telegram or cable, shall refer to Jordan \

USAID Loan Guarantee No. 278-JG-001 A01, and shall be deemed duly given

or sent when delivered to such Party at the following addresses:
To the Borrower:

Ministry of Finance — Hashemite Kingdom of Jordan

Attention: Secretary General

P.O. Box 85

Amman, Jordan 11118

To the United States Government:

United States Agency for International Development

Office of Development Credit, Room 2.10

1300 Pennsylvania Avenue NW, Washington, D.C. 20523-0214

with a copy to:

United States Agency for International Development

P.O. Box 354

Amman, Jordan 11118

All communications shall be in English, unless the Parties otherwise agree in

writing.

Section 6.08. Taxation and Duties. This Agreement, the Eligible Notes

and the proceeds therefrom shall be free from any taxation or fees imposed under

laws in effect in Jordan.

Section 6.09. Annexes. The Annexes to this Agreement constitute an

integral part of this Agreement.

ARTICLE VII. Entry into Force

Section 7.01. Entry Into Force. This Agreement shall enter into force

on the date of the later notification in an exchange of written notifications in

which the Parties notify each other that their respective domestic legal

requirements for entry into force of the Agreement have been fulfilled.

DONE at Amman this p-pA day of August, 2013, in duplicate, in the English

language.
FOR THE UNITED STATES OF FOR THE HASHEMITE

AMERICA:

By etaiss,P

Ms. Beth S. Paige

USAID Mission Director

KINGDOM OF JORDAN:

'

677 C 

e.,......f.

By:

H.E. Mr. Umayya Toukan

Minister of Finance of the

Hashemite Kingdom of Jordan
ANNEX I

Hashemite Kingdom of Jordan

USAID Loan Guarantee No. 278-JG-001 A01

CERTIFICATE AND REQUEST FOR ISSUANCE OF LOAN GUARANTEES

The Hashemite Kingdom of Jordan ("Borrower"), pursuant to the Loan Guarantee

Agreement dated as of , 2013, between the Borrower and the United

States of America (the "Agreement") hereby requests the issuance of Loan

Guarantees (as defined in the Agreement) covering the principal amount of U.S. $

1,250,000,000 and related interest thereon. The estimated date for this action is

. In connection with this request, the Borrower hereby certifies that

it is in full compliance with the terms of the Agreement.

Hashemite Kingdom of Jordan

BY:

TITLE:

DATE:
ANNEX II 

to the

LOAN GUARANTEE AGREEMENT

BETWEEN THE UNITED STATES OF AMERICA

AND THE HASHEMITE KINGDOM OF JORDAN

Whereas this Loan Guarantee Agreement is intended by the Parties to support

economic reform that will help revitalize economic activity and broaden economic

opportunities for Jordanian citizens; and

Recognizing that Loan Guarantees issued under this Agreement would have the

greatest effect if they are part of a broader reform initiative coordinated by the

Hashemite Kingdom of Jordan ("Jordan");

The following economic reform conditions address ongoing reforms in the energy

and water sectors, support strengthening of the business environment, and promote

the establishment of a solid macroeconomic framework. These conditions shall be

satisfied no later than fourteen (14) days prior to the Closing Date and the issuance

of Guarantees.

1. Jordan shall provide USAID with macro-fiscal data required for submission to

the International Monetary Fund (IMF) and any additional data the United

States may request regarding the quantitative performance criteria and

indicative targets defined for the Second Review of the Stand-by Arrangement

(SBA) sufficient to demonstrate that Jordan has implemented and maintained

policies focused on reducing its macroeconomic vulnerabilities.

2. Jordan shall furnish to USAID evidence that it has adopted a bulk electricity

tariff and retail tariff methodology that will provide the National Electric Power

Company (NEPCO) with sufficient revenues to recover costs by 2017. This

methodology shall include a tariff increase in 2013 that, in conjunction with any

other relevant revenue measures, enables NEPCO to recover at least 115

million Jordanian Dinars (JD). The evidence shall include a copy of the

methodology, including the revised electricity tariff schedule and any other
relevant revenue measures, that demonstrates that Jordan has satisfied this

condition.

3. The Ministry of Energy and Natural Resources shall draft a scope of work and

issue a request for proposals to conduct a full, independent regulatory audit of

all electricity distribution companies according to international standards by an

experienced audit team and shall provide USAID a copy of the announced

scope of work and request for proposals.

4. Jordan shall provide USAID with a concept paper that has been approved by the

Council of Ministers for creating a "fast-track" one-stop shop for renewable

energy (RE) projects that will expedite licensing, permitting and incentive

procedures to allow for approval of RE projects within six months of

application.

5. Jordan shall affirm in writing to USAID that it has established a Public Private

Partnership (PPP) unit within the Ministry of Finance with the goal of

improving management of public-private partnerships and designated the head

of the PPP unit to have the rank of Director and to report directly to the

Minister of Finance. Jordan shall further draft terms of reference (TORs) and

qualifications for four key professional staff at the PPP unit and provide USAID

a copy of such TORs.

6. Jordan shall affirm in writing to USAID that it has conducted initial

consultations with relevant stakeholders on a draft discussion strategy paper to

reduce the water sector's losses, both revenue and non-revenue, over the

medium term. Jordan shall also provide to USAID a copy of the draft

discussion strategy paper.

7. Jordan shall affirm in writing to USAID that it has established a system, as set

out in the SBA, to report stocks of debt arrears quarterly, including pending

invoices and claims for current and capital expenditures. Jordan shall provide

to USAID a table detailing its stock of arrears as of the end of 2012.
Dr Abdall nsour

Prime Minister

Hashemite Kingdom of Jordan

DECLARATION

Whereas the Government of the Hashemite Kingdom of Jordan (the Jordanian

Government) and the Government of the United States of America (the U.S. Government)

desiring to enter into a loan guarantee assistance program (the Program) have successfully

negotiated such an agreement;

Recognizing the need to continue to support Jordan as is it undertakes economic reforms

to address domestic and external challenges;

Recognizing that the U.S. Government hopes to reinforce both the Jordanian

Government's economic reform program, as supported by the International Monetary Fund, the

International Bank for Reconstruction and Development, and bilateral donors, as well as the

Jordanian Government's continued access to capital markets at favorable rates;

Whereas Title III of the Department of State, Foreign Operations, and Related Programs

Appropriations Act, 2012, Division I of Public Law 112-74, as amended by section 1706(j) of

the Further Continuing Appropriations Act, 2013, Division F of Public Law 113-6, provides

authority for the use of funds appropriated to the Economic Support Fund for the costs "of loan

guarantees for Jordan";

The Jordanian Government and the U.S. Government hereby:

• welcome the signing today by their respective governments of a Loan Guarantee

Agreement (the Agreement);

• wish to underscore the determination of their respective governments to move forward on

the steps necessary to bring the Agreement into force; and

• look forward to the implementation of a U.S.-guaranteed Jordanian Government

international bond offering.

This Declaration is signed in Amman, Jordan, on August 14, 2013.

Stephanie T. Williams

Chargé d' Affaires, U.S. Embassy Amman

United States of America