WASHINGTON, Sept. 4, 2008 – The U.S Department of Agriculture today announced a change in computing the eligible interest under the Commodity Credit Corporation’s (CCC) Export Credit Guarantee Program (GSM-102).

Because the 52-week Treasury bill (T-bill) auction has now resumed, the CCC hereby modifies the interest coverage basis under GSM-102 to return to the original basis of the 52-week T-bill auction. Until further notice, CCC shall cover interest as follows: the per annum rate to be used to calculate eligible interest shall be the lesser of the interest rate specified between the U.S. bank (or exporter) and the foreign bank or 55 percent of the average investment rate of the most recent 52-week T-bill auction, as announced by the U.S. Department of Treasury prior to the date the eligible interest rate is established or adjusted. In the event that the 52-week T-bill auction rate is unavailable, CCC will announce the new interest rate percent coverage and the alternative base rate within 60 days following the date the 52-week T-bill auction rate became unavailable.

The rate used to calculate eligible interest will be established as of the date of export and will remain in effect through the first interest and/or principal due date. CCC will adjust the interest rate as of each interest and/or principal due date. The adjusted rate shall take effect on the day after an interest and/or principal due date and remain in effect through the next interest and/or principal due date.

This notice supersedes press release #0264-01, issued Sept. 4, 2001, and press release #0105-05, issued July 15, 2005.

Press release # 0264-01 was issued to announce a change in computing the eligible interest coverage under the GSM-102 program. The notice modified the interest coverage basis from the 52-week T-bill auction rate to the 26-week T-bill auction rate. This modification was required due to the discontinuance of the 52-week T-bill auction.

Press release # 0105-05 was subsequently issued to clarify the methodology used by CCC to compute interest coverage under the GSM-102 program.

In the event of any discrepancy between this release and the payment guarantee, the language on the payment guarantee shall prevail as establishing terms and conditions of any CCC payment guarantees issued pursuant to this release.

POINTS OF CONTACT

For further information, contact the Registrations and Operations Branch of FAS at (202) 720-3224, or by e-mail at AskGSM@fas.usda.gov.

FAS news releases are available on the Internet at http://www.fas.usda.gov.

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PR 0138-08