U.S. Department of Agriculture offers credit guarantees for export sales to Ukraine (01/22/06)

U.S. Department of Agriculture offers credit guarantees for export sales to Ukraine

Embassy of the United States

KYIV - The U.S. Department of Agriculture (USDA) Export Credit Guarantee Program (GSM-102) announced the availability of $200 million in credit guarantees to finance commercial exports of U.S. agricultural and food products for Armenia, Azerbaijan, Kazakhstan, Russia and Ukraine for fiscal year 2006, which ends on September 30.

Under this program, the USDA's Commodity Credit Corp. (CCC) reduces the financial risk to lenders by guaranteeing payments due from approved foreign banks to exporters or financial institutions in the United States.

To participate in the program, interested Ukrainian importers must first decide on the product(s) they wish to import and establish contact with a U.S. exporter. All eligible products are listed at: http://www.fas.usda.gov/excredits/gsmcommodities.html.

The guarantees are available to U.S. exporters who wish to supply products to the above countries on a first-come, first-served basis. Coverage of up to 98 percent of the principal is offered on credit terms from 30 days to two years. For exports to Ukraine, the guarantee fee ranges from $0.323 per $100 dollars of coverage for 30 days to $0.876 per $100 dollars of coverage for 36 months based on semi-annual payment of principal. For details, see the GSM-102 Guarantee Fee Rate Schedule at http://www.fas.usda.gov/excredits/gsm102fees.html.

The CCC approved five Ukrainian banks for this program: Bank Aval, Bank Forum, Nadra Bank, UkrSibbank and Ukrsotsbank. The five Ukrainian banks have a total $47.1 million credit limit in the program; however, a bank in another country approved by the CCC in the region is also eligible to participate. For a complete list of eligible banks, see http://www.fas.usda.gov/excredits/foreignbanks.html.

The program requires active interaction between U.S. exporters, Ukrainian importers and the banks involved in the transaction. For additional information, readers may contact Dmitro Prykhodko, Office of Agricultural Affairs, U.S. Embassy in Ukraine, at dmitry.prikhodko@usda.gov or the Contract and Registration Branch of the USDA's Foreign Agricultural Service at AskGSM@fas.usda.gov.

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