TREATIES AND OTHER INTERNATIONAL ACTS SERIES 14-718.1

________________________________________________________________________

LOAN GUARANTEE

Agreement Between the 

UNITED STATES OF AMERICA

and TUNISIA

Signed at Washington June 3, 2014 

with

Annexes
 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

 Loan Guarantee

 Agreement signed at Washington June 3, 2014;

 Entered into force July 18, 2014.

 With annexes.
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 Government") and the Republic of Tunisia 

(the "Government of Tunisia," "Tunisia" or the "Borrower") (together 

"the Parties"). 

ARTICLE I. Purpose 

Section 1.0 I. 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 the Government of Tunisia, acting through the Central Bank of 

Tunisia, is expected to incur. This guarantee assistance program will 

support the Government of Tunisia's economic transition and reform 

initiatives, as supported by the International Monetary Fund and USAID. 

It will also support Tunisia's continued access to the capital markets and 

provide external financing to Tunisia at affordable rates so that a stable, 

democratic Tunisia can provide broader economic opportunity for its 

citizens. 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 2.0 I. 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 (I 00%) of the 

Borrower's repayment of principal under Eligible Notes in an amount not 

to exceed an aggregate principal amount of five hundred million United 

States Dollars (U.S. $500,000,000) together with interest due thereon, 

for a period of seven (7) years from the date of issuance. 

The Guarantees shall be issued in accordance with Title Ill of the 

Department of State, Foreign Operations, and Related Programs 

Appropriations Act, 2012 (Div. I, P.L. I 12-74), 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"). The 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 published by the United States Government 
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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 form being referred 

to herein as the "Debt Agreements"). 

Except as otherwise agreed in writing by the Parties, 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 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 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 

by the Parties, Eligible Notes and the Guarantees issued hereunder shall 

each be issued in one (I) 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 September 30, 

20 14, and the final date to request the issuance of Guarantees under this 

Agreement shall be ten (I 0) days before the Closing Date. 

ARTICLE Ill. Fiscal Agent 

Section 3.0 I. 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. 
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ARTICLE IV. Conditions Precedent 

Section 4.0 I. Borrower's Conditions Precedent. 

(a) Procedural Requirements and Documentation. Except as 

otherwise agreed by USAID in writing, prior to the Closing 

Date the Borrower shall deliver, in form and substance 

satisfactory to USAID, the following: 

(i) a legal opinion from the Conseiller Juridique et de Ia 

Legislation du Gouvernement ("Adviser on Legal Affairs 

and legislation to the Government") or the head of the 

Legal Department of the Central Bank of Tunisia, as is 

appropriate, 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 

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, and, 

prior to the issuance of any Guarantees, USAID shall 

provide Borrower with written notification that the issuance 

of the Guarantees can proceed. 

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 consistent with the terms set 

forth in Sections 4.0 I and 4.02 above. 

ARTICLE V. Special Covenants 

Section 5.0 I. 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 
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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, in addition to any common law rights 

that may apply, by operation of this Agreement, 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 6.0 I. Consultation. The Parties shall cooperate to ensure that the 

purpose of this Agreement will be accomplished. With respect to 

matters relating to the selection of Eligible Underwriters and the fiscal agent 

referred to in Section 3.0 I, the issuance of Eligible Notes, the Debt 

Agreements and 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: 

(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 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 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 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. 
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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 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. 

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 Economy and Finance indicated in section 6.07. 

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

financial aspects of this Agreement, the United States Government shall 

be represented by the individual holding or acting in the office of 

Director, Office of Development Credit, USAID. 

(b) 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 

Tunisia/ USAID Loan Guarantee No. 664-TG-002-AOI, and shall be 

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

addresses: 

To the Borrower: 

Ministry of Economy and Finance contacts: 
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Ministere de I'Economie et des Finances 

Direction general de Ia dette et de Ia cooperation financiere 

Place du Gouvernement, La Kasbah, 

1030 Tunis 

Tel: 216 71 57 18 42 

Fax: 216 71 56 24 IS 

and the Central Bank of Tunisia contacts: 

Banque Centrale de T unisie 

Direction generale des finances exterieures 

25 Rue Hedi Nouira - BP 777 

I 080 Tunis cedex 

Tel: 216 71 122 000 

Fax: 216 71 340 615 

To the United States Government 

United States Agency for International Development 

Office of Development Credit, Room 2.1 0 

1300 Pennsylvania Avenue 

Washington, D.C. 20523-0214 

with a copy to: 

United States Agency for International Development 

Office of the Middle East, Room 4.9-A 

1300 Pennsylvania Avenue 

Washington, D.C. 20523-0214 

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 Tunisia now or in the future. 

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

integral part of this Agreement. 
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ARTICLE VII. Entry into Force 

Section 7.0 I. 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 Washington this ? t -day of June, 2014, in duplicate, in the 

English language. 

FOR THE UNITED STATES OF 

AMERICA: 

Deputy Assistant Administrator 

for the Middle East Bureau, USAID 

FOR THE REPUBLIC OF TUNISIA: 

H.E. 

By:~ m tne hela1fa 

Ambassador of the Republic of 

Tunisia to the United States 
ANNEX I 

to the 

LOAN GUARANTEE AGREEMENT 

BETWEEN THE UNITED STATES OF AMERICA 

AND THE REPUBLIC OF TUNISIA 

Tunisia/USAID Loan Guarantee No. 664-TG-002-AO I 

CERTIFICATE AND REQUEST FOR ISSUANCE OF LOAN 

GUARANTEES 

The Government of the Republic of Tunisia ("Borrower"), pursuant to 

the Loan Guarantee Agreement dated as of , 20 14, 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. $500,000,000 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. 

Republic of Tunisia 

BY: _________ __ 

TITLE:----------

DATE: _________ __ 
ANNEX II 

to the 

LOAN GUARANTEE AGREEMENT 

BETWEEN THE UNITED STATES OF AMERICA 

AND THE REPUBLIC OF TUNISIA 

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 Tunisia's 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 Government of Tunisia ("Tunisia"); 

The following economic reform conditions address ongoing reforms in 

tax administration, customs administration, and investment regulation; 

strengthen the banking sector; support vulnerable households; and 

promote the establishment of a solid macroeconomic framework. 

Unless otherwise agreed by USAID in writing. these conditions shall be 

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

the issuance of Guarantees. 

I. The Government of Tunisia (GOT) shall continue to implement 

appropriate policies to maintain a credible macroeconomic framework 

consistent with its International Monetary Fund (IMF) Stand-By 

Arrangement, and shall provide the U.S. government with all macro-fiscal 

data required for submission to the IMF, as well as any additional data, 

that the United States may request. 

2. Tax reform is critical to private sector development and growth in 

Tunisia. To integrate the tax recovery function into Tunisia's fiscal 

administration and strengthen control mechanisms in customs 

administration, the GOT shall develop a plan to modernize tax 

administration that will incorporate risk-based audit practices, a code of 

conduct, and conflict of interest policies. The Ministry of Economy and 

Finance shall adopt the plan, and the GOT shall provide USAID with a 

copy of the adopted plan. 

3. Customs reform is critical to creating clear rules for investment 

and international trade, and for enhancing Tunisia's export profile. The 

GOT shall develop a plan to ensure full compliance with international 

customs standards, including the Revised Kyoto Convention (RKC) and 

the World Trade Organization (WTO) Agreement on Trade Facilitation. 

The Ministry of Economy and Finance shall approve the plan, and the 

GOT shall provide USAID with a copy of the approved plan. 

4. Simplifying and clarifying investment regulation in Tunisia is critical 

to attracting foreign investment, which is a main priority of the GOT. 

The GOT shall work with the World Bank and International Finance 
Corporation (IFC) to draft a roadmap, including a list of short-term 

measures that will be adopted to strengthen private investment and an 

outline of a medium-term framework for improving Tunisia's investment 

regulations. The GOT shall submit the roadmap to the Council of 

Ministers and shall provide USAID with a copy of the roadmap, as 

submitted. 

5. To strengthen the banking sector, the GOT must develop a crisis 

management plan for dealing with insolvent banks, including the clear 

identification of the agencies responsible for bank resolution and 

liquidation, the treatment of shareholders, and the tools of resolution. 

The GOT shall finalize a draft banking resolution framework that is 

consistent with international best practices and shall submit the draft 

framework to the Board of the Central Bank of Tunisia. The GOT, 

through the Ministry of Economy and Finance, shall provide USAID with 

a copy of the draft bank resolution framework, as submitted for 

discussion to the Board of the Central Bank of Tunisia. 

6. To improve the sustainability of upcoming subsidy reductions and 

promote more inclusive growth, the GOT shall expand its support for 

vulnerable households. The GOT shall provide USAID with a copy of 

the household support program, as submitted to the IMF, and the 

changes specified in the complementary budget law.