Jordan issues new eurobonds guaranteed by Washington

AMMAN — The government has issued a $1 billion worth of US-guaranteed eurobonds in New York on Tuesday, according to Finance Minister Umayya Toukan.  

The interest rate on the five-year issuance reached 1.945 per cent, Toukan said, noting that 34 investors participated in the subscription process and that the issuance was fully covered. 

The US-guaranteed eurobonds issuance reflects the confidence of the international community in the Jordanian economy, despite the difficult political conditions that the region is going through, the Jordan News Agency, Petra, reported. 

Toukan extended his appreciation of the US government for its continued support to the Kingdom.

The US guarantee process was set in motion by President Barack Obama in March 2013, when he visited Jordan. He noted then that a US guarantee, “can help deliver the results that Jordanians deserve… to see their schools better, their roads improved, healthcare, clean water all enhanced”.

Meanwhile, International Monetary Fund (IMF) Mission Chief Kristina Kostial was quoted by Petra as saying: “Jordan’s economy is gradually picking up, with growth expected to increase to 3.5 per cent in 2014 from 2.9 per cent in 2013.”

In a statement issued at the conclusion of an IMF visit to Jordan, led by Kostial, from June 15 to 23, she said: “We had very good discussions on Jordan’s performance under the IMF-supported programme. Despite a difficult environment, the programme has stayed broadly on track through March 2014.”

She added that the central government deficit remained in line with its programmed target and central bank reserves were above the target. 

The 12-month inflation rate is projected to drop to 2.5 per cent by the end of 2014 from 3.3 per cent at the end of 2013, and the current account deficit (excluding grants) continues to narrow, she said. 

“We are pleased that the Jordanian authorities reiterated their commitment to the programme, including by safeguarding adequate reserve buffers in the face of an uncertain environment.”

In particular, she noted, it is important to strengthen the agenda for stronger growth and more jobs, including by improving the business climate; revisiting public sector hiring and compensation; equipping new entrants to the labour market with skills needed in the private sector; addressing the constraints to female labour market participation; and enhancing the quality of institutions.

“We also discussed how to maintain the momentum on fiscal consolidation while distributing the adjustment burden fairly. This will reduce public debt over the medium term, thereby shielding future generations of Jordanians from carrying the debt burden,” Kostial said.