According to sources cited by Reuters on Wednesday, April 27, Tunisia plans to issue a US dollar-denominated bond ‘within weeks’ after securing a $500 million loan guarantee from the United States government last week which led to Tunisia’s decision to cancel a 1 billion EUR bond which had been days away from being floated on European financial markets in Paris and London.
The funds from the bond will go towards plugging Tunisia’s 2016 budget deficit.
U.S. Under Secretary of State for North Africa, John Desrocher, told Tunisian media on April 19 that the U.S. would grant Tunisian the guarantee and on April 20 Tunisian Finance Minister Slim Chaker announced the EURO bond’s cancellation. According to statements from Minister Chaker the guarantee would allow Tunisia to borrow at ‘rates not to exceed 2%’, the EURO bond rates would have been around 5-6% according to the same source.
The visit from Under Secretary Desrocher comes ahead of an upcoming Joint Economic Commission, which will take place May 6 in Washington.
It is the third such loan guarantee, all of the same 500 million USD, sum that the U.S. has extended to Tunisia since a visit last May by President Beji Caid Essebsi to Washington D.C. and met with U.S. President Barack Obama at the Whitehouse. During the visit by President Essebsi to Washington President Obama also declared Tunisia to be a Major Non NATO Ally, a distinction which facilitates U.S. Congressional approval of spending on military aid.