TREATIES AND OTHER INTERNATIONAL ACTS SERIES 14-621

________________________________________________________________________

LOAN GUARANTEE

Agreement Between the 

UNITED STATES OF AMERICA

and JORDAN

Signed at Amman May 5, 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.”
 JORDAN

 Loan Guarantee

Agreement signed at Amman May 5, 2014;

 Entered into force June 21, 2014.

 With annexes.
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") and the Hashemite Kingdom of Jordan ("Jordan" or the 

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

ARTICLE I. Purpose 

Section 1.01. 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 Jordan is expected to incur. This guarantee assistance program 

intends to reinforce Jordan's economic reform program, as supported by the 

International Monetary Fund 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 2.0 1. 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 United States Dollars (U.S. $1,000,000,000) together with interest due 

thereon, for a period up to five (5) years from the date of issuance. 

The Guarantees shall be issued in accordance with Section 7041(g)(l)(A) of 

the Department of State, Foreign Operations, and Related Programs Appropriations 
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Act, 2014 (Div. K, P.L. 113-76) ("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 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 defmitive form being referred to herein as the "Debt 

Agreements"). 

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

maturity of five ( 5) 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 brokerdealer 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 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 (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 
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the fmal 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. Except as otherwise 

agreed by USAID in writing, no later than ten (10) days prior to the 

Closing Date 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 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 shall determine whether the conditions have been satisfied 

consistent with Annex II. 
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Section 4.02. United States' 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 4.01 and 4.02 above, and, 

prior to the issuance of any Guarantees, USAID shall provide Borrower with 

written notification that the issuance of the Guarantees can proceed. 

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, 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 US AID 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 1. 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 and the fiscal agent referred to in Section 3.01, 

the issuance of Eligible Notes, the Debt Agreements and related matters, the Parties 

shall consult through their representatives identified in Section 6.06. 
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Section 6.02. Reports, Books and Records, Audit and Review. The Borrower 

shall: 

(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 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 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. If the United States 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 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 US AID to make any claim for payment, or 

the delay or failure of US AID 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. 
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Section 6.06. Representatives. 

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

financial aspects of this Agreement, the Borrower shall be represented by the 

individual holding or acting in the office of the Secretary General of the Ministry of 

Finance, and the United States shall be represented by the individual holding or 

acting in the office ofDirector, 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 Jordan/ USAID Loan 

Guarantee No. 278-JG-001 B01, 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: 

United States Agency for International Development 

Office ofDevelopment Credit, Room 2.10 

1300 Pennsylvania Avenue, 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. 
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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 now or in the future. 

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 S day of May, 2014, in duplicate, in the English 

language. 

FOR THE UNITED STATES OF 

AMERICA: 

By:M.flzp 

Ms. Beth S. Paige 

USAID Mission Director 

FOR THE HASHEMITE 

KINGDOM OF JORDAN: 

By: U-7r~C:{:-- _________ -t~--

H.E. Dr. Umayya Toukan 

Minister ofFinance of the 

Hashemite Kingdom of Jordan 
ANNEX I 

to the 

LOAN GUARANTEE AGREEMENT 

BETWEEN THE UNITED STATES OF AMERICA 

AND THE HASHEMITE KINGDOM OF JORDAN 

Jordan/USAID Loan Guarantee No. 278-JG-001 B01 

CERTIFICATE AND REQUEST FOR ISSUANCE OF LOAN GUARANTEES 

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

Agreement dated as of , 2014, 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.$ 

1,000,000,000 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 establishing 

a solid macroeconomic framework, in the energy and water sectors, and in budget 

implementation. 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. 

1. The Ministry of Finance (MOF) shall provide USAID with macro-fiscal data 

required for submission to the International Monetary Fund under the Stand-by 

Arrangement (SBA) and any additional data the United States may request 

regarding the quantitative performance criteria and indicative targets defined for 

the Third Review of the SBA sufficient to demonstrate Jordan has implemented 

and maintained policies focused on reducing its macroeconomic vulnerabilities. 

2. To help ensure staying on-track to achieving cost recovery in the electricity 

sector, and to enhance macroeconomic stability over the medium term, the 

Cabinet of Ministers shall approve a Letter of Intent (also referred to as a Head 

of Terms agreement) that authorizes the Ministry of Energy and Mineral 

Resources (MEMR) to enter into negotiations for the necessary liquefied 

natural gas (LNG) supply contract. Jordan shall provide USAID a copy of the 

Letter of Intent (Head of Terms agreement) approved by the Cabinet of 

Ministers authorizing MEMR to start LNG supply contract negotiations. 
3. Pursuant to the action plan in the Ministry of Water and Irrigation's strategy for 

reducing the water sector's losses, both revenue and non-revenue, and to reach 

cost recovery over the medium term, the wastewater tariffs in all governorates 

are to be increased by at least 15 percent over current levels in 2014. Jordan 

shall provide US AID a copy of the Cabinet of Ministers' decision to increase 

these tariffs and a copy of the revised tariff schedule. 

4. Jordan has defined a goal of facilitating private sector investment in Jordan's 

infrastructure and service delivery sectors through promoting public-privatepartnerships (PPPs). The Government of Jordan (GOJ) recently submitted to 

parliament a draft PPP law that is consistent with international best practices, 

and the next step in the PPP process is to define the mandate of the central PPP 

unit. Such a mandate should include key principles such as: 1) advise the GOJ 

on all issues related to undertaking PPPs; 2) ensure that all PPP projects are 

affordable and provide value-for-money; 3) ensure that all PPPs are procured in 

a transparent, fair and competitive manner; and, 4) support a robust public 

relations program that enhances the image of the PPP program and informs all 

key stakeholders, including other agencies of the GOJ. Jordan shall provide to 

US AID a copy of the Minister of Finance's letter approving the mandate of the 

PPP unit. 

5. The sustainability of key units at the MOF, such as the Government Financial 

Management Information System (GFMIS) and central PPP unit (CPPPU), is at 

risk. For example, GFMIS reports that almost 50 percent of the staff of the 

GFMIS have left for better paying jobs, and the MOF is unable to hire 

replacement staff given the GOJ hiring freeze. A sustainable GFMIS is critical 

for the effective and transparent implementation of the national budget. The 

MOF shall be given the authority by the Cabinet of Ministers to hire the needed 

highly qualified technical staff to ensure the sustainability of key units, such as 

GFMIS and CPPPU. Jordan shall provide USAID a copy of the Cabinet of 

Ministers' decision authorizing the MOF to hire the needed highly qualified 

technical staff.