TREATIES AND OTHER INTERNATIONAL ACTS SERIES 16-802

________________________________________________________________________

FOREIGN ASSISTANCE

ECONOMIC COOPERATION

Loan Guarantee

Agreement Between the 

UNITED STATES OF AMERICA

and TUNISIA

Signed at Tunis and Washington June 3 and

June 6, 2016 

with

Annex
 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.”
 TUNISIA

 Foreign Assistance Economic Cooperation:

 Loan Guarantee

 Agreement signed at Tunis and Washington June 3 and 

 June 6, 2016;

 Entered into force August 2, 2016.

 With annex.
LOAN GUARANTEE AGREEMENT 

BETWEEN 

THE UNITED STATES OF AMERICA 

AND 

THE REPUBLIC OF TUNISIA 

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

America (the "United States") and the Republic of Tunisia ("Tunisia" or the 

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

ARTICLE I. Purpose 

The United States, 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 Tunisia, acting through the Central Bank of Tunisia, is 

expected to incur. This guarantee assistance program is intended to 

reinforce Tunisia's economic reform program, as supported by the 

International Monetary Fund and USAID, support Tunisia's continued 

access to the capital markets, and provide external financing to Tunisia 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, 

US AID shall issue Guarantees with respect to the payment obligations of the 

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

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

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

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aggregate principal amount of five hundred million United States Dollars 

(U.S. $500,000,000) together with interest due thereon, for a period up to 

five (5) years ("Maximum Term") from the date of issuance. The 

Guarantees shall be issued in accordance with Section 7034( o) of the 

Department of State, Foreign Operations, and Related Programs 

Appropriations Act, 2016 (Div. K, P.L. 114-113). The Guarantees 

constitute, as a matter of domestic U.S. law, obligations of the United States, 

and the full faith and credit of the United States 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 published by the United States 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 the guarantee assistance program described in Article I 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 form 

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

Except as otherwise agreed in writing by the Parties, Eligible Notes 

shall have a maturity of no more than the Maximum Term with interest paid 

on a regular basis and principal paid at maturity. 

Section 2.03. Eligible Underwriters. Except as otherwise agreed in 

writing by the Parties, "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 broker-dealers under the Securities 

Exchange Act of 1934, as amended, and membership in the Financial 

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Industry Regulatory Authority); and (c) are financially capable of serving as 

an underwriter for the issuance of Eligible Notes. The costs for the services 

of Eligible Underwriters shall be paid by the Borrower and may be paid 

from the proceeds of the Eligible Notes made available at the issuance of the 

Eligible Notes (the "Closing Date"). 

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

the Parties, Eligible Notes and the Guarantees shall be issued 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 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 Closing Date 

shall be no later than thirty (30) days after the entry into force of this 

Agreement. 

ARTICLE III. Fiscal Agent 

The fiscal agent for the Borrower shall be selected by Tunisia and 

approved by USAID in writing 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. Except as otherwise 

agreed by USAID in writing, p~ior to the issuance of the Guarantees the 

following must have occurred: 

(a) Programmatic Conditions. The programmatic conditions 

precedent set forth in the Annex must have been satisfied, and 

Tunisia must have provided to USAID all material, in form and 

substance satisfactory to USAID, necessary for the United 

States to determine that such programmatic conditions 

precedent have been satisfied at least ten (10) days prior to the 

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commencement of marketing of the Eligible Notes (the 

"Marketing Date"). 

(b) Pricing Conditions. Tunisa must have required the Eligible 

Underwriters to provide USAID with a reasonable estimate of 

the issuance price at least three (3) business days prior to the 

Marketing Date. 

(c) Procedural Requirements and Documentation. No later than the 

day before the Marketing Date, the Borrower must have 

delivered, in form and substance satisfactory to USAID, the 

following: 

(i) the final form of a legal opinion from the 

Conseillerjuridique et de Ia Legislation du 

Gouvernement ("Adviser on Legal Affairs and legislation 

to the Government") 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) the final form of the Debt Agreements, all documents 

required by the terms of the Debt Agreements, and any 

related agreements to satisfy the conditions precedent 

therein, except the final pricing will be completed after 

the Marketing Date; 

(iii) a statement ofthe names of the persons holding the 

offices specified in Section 6.06 and those of any 

additional representatives, together with a specimen 

signature of each person so designated; and 

(iv) such other documents and representations as USAID may 

reasonably request with respect to the transactions 

contemplated by this Agreement. 

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Section 4.02. United States' Conditions Precedent. Except as 

otherwise agreed byTunisia in writing, upon or prior to the issuance of the 

Guarantees, USAID must have delivered, 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 consistent with the terms set forth in Sections 4.01 and 

4.02 above, and, prior to the Closing Date, USAID shall provide the 

Borrower with written notification that the conditions in the Annex have 

been satisfied and that the issuance of the Guarantees can proceed. 

ARTICLE V. Special Covenants 

Section 5.01. Reimbursement and Subrogation. The Borrower agrees 

that ifUSAID 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 the Debt Agreements, 

("Default") the Borrower shall promptly reimburse USAID for such 

payment. US AID shall promptly inform the Borrower of any such payment. 

If (i) US AID makes any such payment described above and the 

Borrower has not repaid USAID that full amount within thirty (30) days of 

USAID making such payment; (ii) USAID makes a similar payment on 

Borrower's behalf for any other outstanding debt issued byTunisia and 

guaranteed by USAID ("Prior Debt") and the Borrower has not repaid USAID 

the full amount of such similar payment within thirty (30) days ofUSAID 

making such payment; or (iii) the Borrower informs USAID that it does not 

intend to service the Debt Agreements or the corresponding debt agreements 

for the Prior Debt ("Prior Debt Agreements") in full, US AID has the right, 

but not the obligation, without notice or consent, to accelerate the debt owed 

to USAID by the Borrower under the Debt Agreements and the Prior Debt 

Agreements as if the Borrower had defaulted on all future payments due 

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under the Debt Agreements and the Prior Debt Agreements. If US AID 

exercises this right, the net present value of all unpaid (including future) 

principal and interest payments due under the Debt Agreements and the Prior 

Debt Agreements shall be immediately due and payable to USAID on the 

date USAID notifies the Borrower in writing that USAID is exercising this 

right and, in return, USAID shall assume the obligation to make all further 

payments due to the fiscal agent under the Debt Agreements and Prior Debt 

Agreements. Interest shall begin accruing immediately on the amount owed 

to USAID at a reasonable rate provided by USAID in its notice of 

acceleration. The interest rate shall be in the sole discretion ofUSAID, but 

shall not be less than the applicable U.S. Treasury rate used to calculate the 

net present value and shall not be greater than one hundred (I 00) basis 

points above the applicable U.S. Treasury rate. The United States shall 

calculate the net present value using the applicable U.S. Treasury rate. 

In the event of a Default, USAID shall become subrogated to all the 

rights of the Noteholders against the Borrower in respect of the relevant 

payment. 

Section 5.02. Late Payment Charge. In the event USAID makes 

payments on behalf of the Borrower under the Guarantees, a late payment 

charge shall accrue on all such amounts paid by USAID. This late payment 

charge shall accrue to USAID under the same terms and conditions as late 

payment charges due the Noteholders, as such charges are prescribed in the 

Eligible Notes. The late payment charge includes interest and may include 

other charges 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 ensure that the 

purpose of this Agreement is accomplished. With respect to matters relating 

to the selection of Eligible Underwriters and the fiscal agent referred to in 

Article III, the issuance of Eligible Notes, and the Debt Agreements and 

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related matters, the Parties shall consult through their representatives 

identified in Section 6.06. 

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

Borrower shall, so long as the Eligible Notes shall be outstanding, or any 

claim under the Guarantees is outstanding, and for a period of three (3) years 

thereafter: 

(a) furnish to the United States 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 by the government 

of Tunisia, books and records relating to the Eligible Notes, the 

Debt Agreements, and this Agreement. Such books and records 

shall be reviewed by the Commissaires aux Comptes 

("Commissioners of Accounts") for the Central Bank of Tunisia 

to the extent provided in the applicable laws of Tunisia; and 

(c) afford authorized representatives of the United States 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 shall 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. The United States 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, ifthe United States determines: 

(a) that the terms of this Agreement have been breached by Tunisia; 

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(b) that the conditions precedent for issuing Guarantees set forth in 

Section 4.01 of this Agreement or any Annex hereto are not 

satisfied; or 

(c) that Tunisia has defaulted on or restructured any debt owed to or 

guaranteed by the United States, the International Monetary 

Fund, or the International Bank for Reconstruction and 

Development. 

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 US AID 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 Agreements 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 

("Implementation Letters"). For the avoidance of doubt, no such 

Implementation Letters shall affect the rights and obligations of the Parties 

hereunder without their express written consent. 

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 

Directorate-General at the Central Bank of Tunisia 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 Directorate-General of the Ministry of Finance indicated 

in section 6.07. 

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(c) For purposes relevant to the implementation of the technical and 

financial aspects of this Agreement, the United States shall be represented by 

the individual holding the position of or acting as the US AID Assistant 

Administrator for Middle East Bureau. 

(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, and shall refer to the 

Tunisia/ USAID Loan Guarantee number. All communications shall be in 

English, unless the Parties agree otherwise in writing, and shall be deemed 

duly given or sent when delivered to such Party at the following addresses: 

To the Borrower: 

Ministry of Finance contacts: 

Ministere des Finances 

Direction general de la dette et de la cooperation financiere 

Place du Gouvemement, La Kasbah, 

1030 Tunis 

Tel: 216 71 57 1842 

Fax: 216 71 56 24 15 

and the Central Bank of Tunisia contacts: 

Banque Centrale de Tunisie 

Direction general de la gestion des reserves et des marches 

25 Rue Hedi Nouira - BP 777 

1080 Tunis cedex 

Tel: 216 71 122 000 

Fax: 216 71 340 615 

To the United States: 

United States Agency for International Development 

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Office ofDevelopment Credit, Room 2.10 

1300 Pennsylvania Avenue, N.W. 

Washington, D.C. 20523 

with a copy to: 

United States Agency for International Development 

Office of the Middle East, Room 4.9-A 

1300 Pennsylvania Avenue, N.W. 

Washington, D.C. 20523 

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 Tunisia now or in the future. 

Section 6.09. Annex. The Annex to this Agreement constitutes an 

integral part of this Agreement. 

ARTICLE VII. 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. To implement this section, 

Tunisia shall initiate the exchange of written notifications such that the 

Agreement would enter into force on the date of the written notification by 

the United States. 

SIGNED at Tunis, Tunisia on the 3rd day of June, 2016, and at \N~\.\+"'•~•~ 

on the <9+"' day of 3u""-e , 20 n . ., in duplicate, in the English language. 

FOR THE UNITED STATES OF 

AMERICA: 

ar-~~ 

FOR THE REPUBLIC OF 

TUNISIA: 

JL-0~L 

10 
ANNEX 

TO THE 

LOAN GUARANTEE AGREEMENT 

BETWEEN THE UNITED STATES AMERICA 

AND THE REPUBLIC OF TUNISIA: 

Whereas this Agreement is intended by the Parties to support 

economic reform that will help revitalize economic activity and broaden 

economic opportunities for Tunisia 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 Tunisia; 

The following economic reform conditions address expected reforms 

in the areas of a sustainable macroeconomic framework, financial sector 

reform, reforms to the investment code, business climate reforms, tax 

reform, customs reform, as well as a Tunisian commitment to issue 

unenhanced sovereign debt internationally. 

1. Tunisia shall fulfill International Monetary Fund (IMF) requested 

economic reform measures and macroeconomic policies sufficient to 

obtain IMF Board approval of a new Extended Fund Facility (EFF). 

Tunisia shall provide evidence to USAID of the measures Tunisia has 

taken to meet the IMF's requirements for Board approval of the EFF, as 

well as all macro-fiscal data required for submission to the IMF. 

2. The Central Bank ofTunisia, acting on the representation mandate of the 

Ministry of Finance, shall affirm in writing its commitment to issue 

unenhanced sovereign debt internationally of equal size as, or greater size 

than, and in parallel with this U.S. guaranteed issuance and shall provide 

a written plan of action to US AID for such issuance. In this plan, Tunisia 

shall affirm its understanding that deepening its regular, unenhanced 

capital market access is a core objective of this U.S. loan guarantee and 

that a decision not to issue in parallel would be inconsistent with this 

commitment. For purposes of the foregoing, "in parallel with this U.S. 

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guaranteed issuance" refers to the entire period of time from three 

months prior to the signing of the Agreement through six months after its 

U.S. guaranteed issuance, and in any instance no later than January 15, 

2017. Should Tunisia opt not to proceed with its unenhanced issuance 

under prevailing market conditions prior to or at the time of its 

guaranteed issuance, it affirms by signing this Agreement that this period 

of time provides all necessary flexibility to complete its unenhanced 

Issuance. 

3. Tunisia, acting through the Ministry of Finance, shall recapitalize Societe 

Tunisienne de Banque and la Banque de 1 'Habitat. Tunisia shall commit 

in writing to USAID to enacting the banking reform law that includes a 

bank resolution framework and a Central Bank of Tunisia law that aligns 

with Tunisia's commitments to the IMF. Tunisia shall affirm to USAID 

in writing its commitment to future efforts to bring the bank resolution 

framework and Central Bank of Tunisia law in line with international 

best practices. 

4. Tunisia shall affirm to USAID in writing its commitment to adopt before 

September 30, 2016, the implementation decrees for the new investment 

code following adoption of the code by the Assembly of the 

Representatives of the People. The code shall be in line with 

international best practices with an emphasis on protecting market access, 

reducing investment restrictions, and moving exemptions from the 

investment code to the tax code and rationalizing them. Tunisia shall 

also identify the government offices responsible for implementing the 

code. 

5. Tunisia shall pass and publish new bankruptcy, competition and publicprivate partnership laws in line with international best practices. Tunisia 

shall also identify to USAID in writing the government offices 

responsible for implementing them. 

6. To build on Tunisia's initial progress on tax reform in the 2016 budget 

process, to provide a framework for future reform measures, and to give 

investors more clarity and confidence in the tax system in the medium 

term, in preparation for fulfillment of prior actions for the EFF, Tunisia 

shall provide to USAID a copy of the tax reform strategy approved by the 

Council of Ministers. 

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7. Tunisia, acting through the Minister of Finance, shall obtain private 

sector input on customs reform. Tunisia shall organize two consultations 

to identify the private sector's challenges in working with Customs: the 

first with the Union Tunisienne de l'Industrie, du Commerce et de 

1 'Artisanat (UTICA) and the second with the Federation Nationale du 

Textile (FENATEX). Once problem points are identified, Tunisia shall 

put in place a framework for resolving them. Meeting minutes and a 

summary of recommendations from the meetings shall be provided to 

US AID. 

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