CCC Amends Coverage of Non-Interest-Bearing Debt Obligations Under the GSM-102 Program

WASHINGTON, April 20, 2011 -- The U.S. Department of Agriculture announced today a change in coverage of non-interest bearing obligations under the Commodity Credit Corporation's (CCC) Export Credit Guarantee Program (GSM-102). In such transactions, CCC will cover 97 percent of principal for repayment periods up to 12 months. Such guarantees will be available for applications submitted in accordance with the provisions of 7 C.F.R. 1493.40, and CCC's obligation will be the same as stated in 7 C.F.R. 1493.60(a). CCC's guarantee fees for these transactions will be the same as the fees announced on the FAS website for comparable risk categories and credit periods.

Exporters requesting coverage for non-interest bearing obligations should so indicate on their application for the payment guarantee.

By announcing this change in coverage, CCC is responding to requests by a number of U.S. banks and exporters to increase flexibility in the GSM-102 program and to meet the specific financing needs of foreign buyers. This adaptation of the GSM-102 program may be used by importers where the repayment arrangement provides for deferred payment of a principal amount only, without provisions for separate interest charges. CCC recognizes that in such transactions, financing costs are normally reflected in the sales price. The 97-percent coverage level will remain in effect until CCC determines, based on changes in commercial interest rates or other factors, that it is necessary to announce a new rate of coverage.

This Notice is issued in accordance with 7 C.F.R. 1493.10(c) and supersedes PR# 0860-97, issued Dec. 30, 1997.

For further information, contact the Operations and Analysis Branch of FAS at (202) 720-3277, or by e-mail at gsm.registrations@fas.usda.gov.