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in the consolidated statements of income, relating to these derivative contracts. Bunge expects to reclassify approximately $2 million to interest expense in 2005. 

## 16. short-term debt and credit facilities 

Short-term borrowings consist of the following: 

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Bunge’s short-term borrowings, predominantly held with com- mercial banks, are primarily used to fund readily marketable inventories and other working capital requirements. The weighted average interest rate on short-term borrowings at December 31, 2004 and 2003 was 4.2% and 2.36%, respectively. 

In connection with the financing of readily marketable inventories, Bunge recorded interest expense on debt financing readily mar- ketable inventories of $46 million, $34 million and $31 million for the years ended December 31, 2004, 2003 and 2002, respectively. 

At December 31, 2004, Bunge had a $600 million commercial paper program facility to fund working capital requirements. At December 31, 2004, Bunge had approximately $199 million of unused and available borrowing capacity under its commercial paper program facility and other committed short-term lines of credit with a number of lending institutions. 

## 17. long-term debt 

Long-term obligations are summarized below: 

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(1) LIBOR as of December 31, 2004 and 2003 was 1.54% and 1.16%, respectively. 

(2) BNDES loans are Brazilian government industrial development loans. 

(3) IGPM is a Brazilian inflation index published by Fundação Getulio Vargas. The annualized rate for the years ended December 31, 2004 and 2003 was 12.42% and 8.71%, respectively. 

In April 2004, Bunge completed the sale of $500 million aggre- gate principal amount of unsecured senior notes bearing interest at a rate of 5.35% per year that mature in April 2014. The senior notes were issued by Bunge’s wholly owned finance subsidiary, Bunge Limited Finance Corp., and are fully and unconditionally guaranteed by Bunge. Interest on the senior notes is payable semi-annually in arrears in April and October of each year, com- mencing in October 2004. Bunge used the net proceeds of this offering of approximately $496 million for the repayment of other outstanding indebtedness. 

