USDA initiates new fees for export credit program

FAS has initiated a new fee structure to be charged for coverage under the CCC’s Export Credit Guarantee Program.

Excerpt from American Shipper  |  By Chris Gillis  | October 31, 2014

 The U.S. Department of Agriculture’s Foreign Agricultural Service has initiated a new fee structure and pending new guarantee fee rates to be charged for coverage under the Commodity Credit Corporation’s Export Credit Guarantee Program (GSM-102). 

The new guarantee fee rates will apply to applications for payment guarantees and amendment requests received on Friday, Oct. 31. 

Factors impacting the new fee structure are obligor country, foreign financial institution, tenor and repayment terms. 

To assist participants in determining the appropriate fee for each transaction, FAS also launched an online fee calculator. “Participants may select an obligor country and foreign financial institution using the calculator’s drop-down menus to generate a set of fees for each eligible tenor and repayment term,” the agency said.

FAS said the new guarantee fee “rates reflect historical program performance, country risk (including current and expected individual country macroeconomic performance), and individual foreign obligor risk, and are designed to offset the risk of each individual GSM-102 program transaction. Rates are also calculated to cover the GSM-102 program’s long-term operating costs and losses.”

The agency warned that “guarantee fee rates may change at any time. Any updates will be made to the online fee calculator by 9 a.m. Eastern on the day the new rates take effect.

“Participants should access the fee calculator to verify the appropriate fee rate for each transaction prior to submitting an application for a payment guarantee,” FAS said.