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TRADE RECEIVABLES SECURITIZATION PROGRAM | 9 Months Ended
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Sep. 30, 2011
TRADE RECEIVABLES SECURITIZATION PROGRAM |
TRADE RECEIVABLES SECURITIZATION PROGRAM |
13. TRADE RECEIVABLES SECURITIZATION PROGRAM In January 2010, Bunge adopted a FASB issued standard that resulted in amounts outstanding under its then existing securitization programs being accounted for as secured borrowings and reflected as short-term debt on its condensed consolidated balance sheet. As a result of this change in accounting standards, Bunge significantly reduced its utilization of these programs and either terminated or allowed them to expire during 2010. On June 1, 2011, Bunge and certain of its subsidiaries entered into a trade receivables securitization program (the “Program”) with a financial institution as administrative agent and certain commercial paper conduit purchasers and committed purchasers (collectively, the “Purchasers”) that provides for funding up to U.S. $700 million against receivables sold into the program. The securitization program is designed to enhance Bunge’s financial flexibility by providing an additional source of liquidity for its operations. In connection with the securitization program, certain of Bunge’s U.S. and non-U.S. subsidiaries that originate trade receivables may sell eligible receivables in their entirety on a revolving basis to a consolidated bankruptcy remote special purpose entity, Bunge Securitization B.V. (BSBV) formed under the laws of The Netherlands. BSBV in turn sells such purchased trade receivables to the administrative agent (acting on behalf of the Purchasers) pursuant to a receivables transfer agreement. In connection with these sales of accounts receivable, Bunge receives a portion of the proceeds up front and an additional amount upon the collection of the underlying receivables (a deferred purchase price), which is expected to be generally between 10 and 15 percent of the aggregate amount of receivables sold through the program. Bunge Finance B.V. (BFBV), a wholly-owned subsidiary of Bunge, acts as master servicer, responsible for servicing and collecting the accounts receivable for the securitization program. The securitization program terminates on June 1, 2016. However, each committed purchaser’s commitment to fund trade receivables under the securitization program will terminate on May 31, 2012 unless extended for additional 364-day periods in accordance with the terms of the receivables transfer agreement. The trade receivables sold under the securitization program are subject to specified eligibility criteria, including eligible currencies and country and obligor concentration limits. BSBV purchases trade receivables from the originating Bunge subsidiaries using (i) proceeds from the sale of receivables to the administrative agent, (ii) collections of the deferred purchase price and (iii) borrowings from BFBV under a revolving subordinated loan facility. As of September 30, 2011, $716 million of receivables sold under the Program were derecognized from Bunge’s condensed consolidated balance sheet. Proceeds received in cash related to these transfers, including collection of the deferred purchase price and subordinated loan activity, totaled $3,755 million for the nine months ended September 30, 2011. Cash collections from customers on receivables previously sold were $3,014 million for the nine months ended September 30, 2011. As this is a revolving facility, cash collections from customers are reinvested in new receivable sales. Gross receivables sold under the program were approximately $2,915 million and $3,755 million for the three and nine months ended September 30, 2011, respectively. These sales resulted in a discount of $2 million for both the three and nine months ended September 30, 2011. Servicing fees under the program were not significant. Bunge’s risk of loss following the sales of accounts receivable is limited to the deferred purchase price outstanding, which is recorded at fair value and was $155 million at September 30, 2011. The deferred purchase price is repaid in cash as receivables are collected, generally within 30 days. Delinquencies and credit losses on accounts receivable sold under the program in 2011 were insignificant. Because the cash received up front and the deferred purchase price related to the sale or ultimate collection of the underlying receivables are not subject to significant risks other than credit risk, given their short term nature, we reflect all cash flows under the securitization program as operating cash flows in our condensed consolidated statement of cash flows for the nine months ended September 30, 2011. Changes in the fair value of the deferred purchase price were not significant and are reported as investing activities in Bunge’s condensed consolidated statement of cash flows for the nine months ended September 30, 2011.

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- Definition Provides the disclosures pertaining to a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 140 -Paragraph 17 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS140-4 and FIN46(R)-8 -Paragraph 6 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS140-4 and FIN46(R)-8 -Paragraph B1-B12 + Details
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