Tunisia has signed a $150 million, sevenyear syndicated loan with 24 banks. The loan, which is expected to be used by the government for general spending rather than refinancing other debts, has a grace period of five years and is priced at 50 basis points over the London interbank offered rate (Libor) for the first five years and 60 basis points over Libor for the last two years.

The arrangers for the loan were ABC International Bank, Bank of Tokyo-Mitsubishi, Dresdner Bank Luxembourg, NatWest Markets and Societe Generale. The banks were originally mandated to raise $100 million, but the amount was increased after the original facility was oversubscribed.

Tunisia borrowed another $200 million through a syndicated loan earlier this year, arranged by Societe Generale, Commerzbank and Sanwa Bank. That loan was priced higher, at 70 basis points over Libor. The North African state's previous sovereign loan, in 1992, was much more expensive at 112.5 basis points over Libor.

The market's improving perception of Tunisian risk was also underscored by the central bank's latest samurai bond issue on 12 September, which raised $137 million. The bonds were priced at 152 basis points over Japanese government bonds, compared to the 180 basis points of last year's issue. The bonds' maturity, of 15 years, was also longer than in the past (see Tunisia).