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Tunisia to issue $1.75bn bonds this year

Africa Global Funds
Jan. 13, 2015, midnight
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Tunisia is planning to issue $1.75bn of dollar-denominated and Islamic bonds in 2015 as it seeks funds to revive economic growth, according to the central bank governor Chadli Ayari.

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Tunisia is planning to issue $1.75bn of dollar-denominated and Islamic bonds in 2015 as it seeks funds to revive economic growth, according to the central bank governor Chadli Ayari.

"We will issue $750 million in bonds at the end of January in addition to sukuks, which will reach $1 billion in the third quarter of the year," Avari told Reuters on the sidelines of a conference.

He earlier told reporters the dollar-denominated issue would be for 10-year bonds.

Discussions with the market over the issue would start on January 15, he said.

Ayari said Tunisia's growth last year was 2.4% and its fiscal deficit was 4.6% of gross domestic product, while inflation was 5.5%.

The government last year said Tunisia's economy needed at least three more years of painful and politically difficult reforms to revive growth after the damage caused by the 2011 revolution.

The government also said that to finance its 2015 budget, Tunisia would need 8 billion dinars ($4.2bn), of which 5 billion dinars would come from foreign sources such as multilateral lenders.

The International Monetary Fund agreed in 2012 to support Tunisia with a two-year credit worth some $1.74bn.

In exchange, Tunisia agreed to follow certain economic polices, such as keeping its deficit under control and making the foreign exchange market more flexible.

Earlier, Finance Minister Hakim Ben Hamouda said that Tunisia was delaying a planned $500m issue of sukuk until the third quarter of this year to give parliament time to rectify a law covering the emission.

He did not give any details on the planned changes.

Islamic bonds or sukuks are bonds issued according to religious guidelines, such as bans on interest and monetary speculation.

Tunisia passed a law allowing Islamic bonds in 2013 and hoped to attract large amounts of Islamic-oriented funds from the Gulf investors.

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