THE LOAN GUARANTEE

The GSM-102 program provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products. By reducing financial risk for lenders, credit guarantees encourage exports to buyers in countries—primarily developing countries—that have sufficient financial strength to have foreign currency available for scheduled payments.

The program is available to exporters of:

high-value, consumer-facing processed products such as frozen foods, fresh produce, meat, condiments, wine and beer;

intermediate products such as hides, flour and paper products; And

bulk products such as grains, oilseeds and rice.

About the Export Credit Guarantee Program (GSM-102)
The U.S. Department of Agriculture's (USDA) Export Credit Guarantee Program (GSM-102) provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products. By reducing financial risk for lenders, credit guarantees encourage exports to importers from countries, primarily developing countries, that have sufficient financial strength to have foreign exchange available for scheduled payments.

The GSM-102 program guarantees credit extended by the private financial sector in the United States (or, less commonly, by the U.S. exporter) to approved foreign financial institutions using irrevocable dollar-denominated letters of credit for product purchases American food and agriculture. by foreign importers. USDA's Foreign Agricultural Service (FAS) administers the program on behalf of the Commodity Credit Corporation (CCC), which issues the credit guarantees. GSM-102 covers credit terms of up to 18 months; Maximum durations may vary by country.

The CCC guarantees payments due from approved foreign financial institutions to exporters or financial institutions in the United States. However, financing must be obtained from normal commercial sources. Typically, 98% of the principal and a portion of the interest are covered by collateral. Any subsequent credit agreement between the foreign financial institution and the importer is negotiated separately and is not covered by the CCC guarantee. The FAS website provides information on specific country and product allocations and other program information and requirements.