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13. TRADE RECEIVABLES SECURITIZATION PROGRAM
Bunge accounts for its trade receivables securitization program (the “Program”) under the provisions of ASC Topic 860, Transfers and Servicing. The securitization program terminates on June 1, 2016. However, each committed purchaser’s commitment to fund trade receivables sold 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.
As of March 31, 2012, $729 million of receivables sold under the Program were derecognized from Bunge’s condensed consolidated balance sheet. Proceeds received in cash related to transfers of receivables under the program totaled $3,240 million for the three months ended March 31, 2012. In addition, cash collections from customers on receivables previously sold were $3,549 million for the three months ended March 31, 2012. As this is a revolving facility, cash collections from customers are reinvested to fund new receivable sales. Gross receivables sold under the program for the three months ended March 31, 2012 were $3,466 million. These sales resulted in a discount of $2 million. Servicing fees under the program were not significant. Since the program was launched in the second quarter of 2011, there is no comparable activity for the first quarter of 2011.
Bunge’s risk of loss following the sale of the accounts receivable is limited to the deferred purchase price, which was $200 million at March 31, 2012. The deferred purchase price will be repaid in cash as receivables are collected, generally within 30 days. Delinquencies and credit losses on accounts receivable sold under the program during 2012 were insignificant. Bunge has reflected all cash flows under the securitization program as operating cash flows in the condensed consolidated statement of cash flows for the three months ended March 31, 2012, including changes in the fair value of the deferred purchase price of $1 million.
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