THE GSM-102 PROGRAM
The GSM-102 program provides credit guarantees
Eligible countries or regions
Interested parties, including U.S. exporters, foreign importers, and financial institutions, may request that CCC establish a GSM-102 program for a country or region. Before announcing the availability of guarantees, CCC evaluates the ability of each country and foreign financial institution to service CCC-guaranteed debt. New financial institutions may be added, or approval levels for others may be increased or decreased, as information becomes available.
The GSM-102 program
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 provide foreign currency for scheduled payments.
The program is offered to exporters of:
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high-value processed products for the consumer, such as frozen foods, fresh produce, meat, condiments, wine and beer;
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intermediate products such as hides, flour and paper products; and
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bulk products such as cereals, 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 to lenders, credit guarantees encourage exports to importers in 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 qualified foreign financial institutions using irrevocable, dollar-denominated letters of credit for purchases of U.S. food and agricultural commodities by foreign importers. The 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 terms may vary by country.
The CCC guarantees payments owed by qualified foreign financial institutions to exporters or financial institutions in the United States. However, financing must be obtained from normal commercial sources. Typically, 98 percent of the principal and a portion of the interest are covered by a guarantee. Any subsequent credit arrangements between the foreign financial institution and the importer are negotiated separately and are not covered by the CCC guarantee. The FAS website provides information on country-specific and product-specific allocations and other program information and requirements.