On April 30, 2020, the Board of Governors of the Federal Reserve System (the Federal Reserve) announced changes to its Main Street Lending Program (MSLP) in response to feedback from the public with respect to its initial term sheets published on April 9, 2020. We described the terms of the prior iteration of the MSLP in a previous GT Alert. The MSLP is intended to provide credit support to small- and medium-sized businesses during the current economic crisis caused by the COVID-19 pandemic. The Federal Reserve Bank of Boston will implement the program by creating a special purpose vehicle (SPV) to purchase up to $600 billion of participations in eligible loans made to eligible borrowers originated by eligible lenders. The U.S. Department of the Treasury will provide $75 billion for the program using funds authorized to Treasury by Title IV of the CARES Act. View MSLP Frequently Asked Questions, released April 30. The Federal Reserve stated that a start date for the MSLP will be announced “soon.”

Public comments received by the Federal Reserve indicated that the program should be broader and accessible to more businesses. In response, on April 30 the Federal Reserve announced several changes to the program that include lowering the minimum loan size to $500,000, expanding borrower eligibility, creating a third loan facility option, “Priority Loans,” in addition to making refinements to the New Loan Facility and the Expanded Loan Facility, and allowing for the use of adjusted EBITDA in connection with determining the leverage ratio for purposes of calculating the maximum loan amount.

Continue reading the full GT Alert, which contains a useful chart summarizing the terms of the three loan facilities.

Tags: CARES Act, coronavirus, COVID-19, Federal Reserve, GT Insight, Main Street Lending Program, U.S. Treasury Department
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Photo of Lee Ann Anderson Lee Ann Anderson

Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has…

Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has counseled scores of companies about relief under Titles I and IV of the CARES Act and relief programs established by the Federal Reserve.

Lee Ann counsels issuers and investment banks on certificates of deposits, including rates-, commodities-, equity-, and proprietary index-linked products. She has wide-ranging experience in debt and equity capital markets, securitizations, and other structured finance transactions. Her practice has included scores of domestic and international debt and equity offerings, as well as securitizations of receivables and other collateral, complex tax-based structures utilizing swaps and other derivatives. Lee Ann also has advised a number of foreign and domestic public companies with respect to a wide range of corporate and securities matters, including reporting obligations.

Additionally, Lee Ann has deep experience counseling clients on corporate transactions, including mergers, stock purchases, asset sales, joint ventures, and other reorganization transactions. She also provides a range of general corporate and governance advice. Lee Ann has a strong commitment to pro bono work and served as a pro bono coordinator at her previous firm.

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Photo of Richard C. Kim Richard C. Kim

Richard C. Kim is Co-Chair of the firm’s Global Finance Practice and Co-Chair of the New York Corporate Practice. Richard focuses his practice on representing private equity sponsors, public and private borrowers, lead arrangers and lenders in connection with syndicated and bilateral loan…

Richard C. Kim is Co-Chair of the firm’s Global Finance Practice and Co-Chair of the New York Corporate Practice. Richard focuses his practice on representing private equity sponsors, public and private borrowers, lead arrangers and lenders in connection with syndicated and bilateral loan financings, including senior secured financings, first lien and second lien financings, unsecured financings, investment grade financings, acquisition financings and bridge financings.

Richard also serves as the Co-Hiring Chair and the Co-Career Development Liaison for the firm’s New York office.

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Photo of Barbara A. Jones Barbara A. Jones

Barbara A. Jones is Co-Managing Shareholder of the firm’s Los Angeles office and a member of the firm’s Global Corporate practice. Barbara serves as Chair of the firm’s interdisciplinary Blockchain & Digital Assets practice. Barbara maintains a diverse corporate and securities law practice

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Barbara A. Jones is Co-Managing Shareholder of the firm’s Los Angeles office and a member of the firm’s Global Corporate practice. Barbara serves as Chair of the firm’s interdisciplinary Blockchain & Digital Assets practice. Barbara maintains a diverse corporate and securities law practice across industry groups, emphasizing complex international and domestic transactions, including private and public financings, dual listings, mergers and acquisitions, strategic collaborations and joint ventures, and licensing transactions. She serves as a trusted advisor to public and private company boards of directors on governance matters and complex regulatory reporting and compliance issues. Barbara’s clients include financial institutions, private equity and venture capital groups, and public and private companies in emerging technology, life sciences and biotechnology, defense and security, blockchain and digital assets, telecommunications, information technology, energy (traditional and renewable), mining, media, entertainment and sports. Barbara also represents Olympic and professional athletes and sports-related organizations.

Barbara practiced U.S. law in London from 1990 through 1997 with Sullivan & Cromwell, LLP, and headed the international capital markets practice of Kirkland & Ellis LLP from 1999 to 2003 before relocating to Boston. From 1997 to 1999, she served as Vice-President, Assistant General Counsel and Regional Counsel for capital markets with J.P. Morgan Securities Ltd. in Europe, the Middle East and Africa. Since returning to the U.S., she has continued to actively represent public and private companies, private equity groups and investment banks in the European, Scandinavian, African and greater Asian markets, including China.

Barbara is a past chair of the ABA’s Subcommittee on International Securities Matters. She is a frequent speaker at conferences relating to cross-border securities matters, strategic alternatives, and digital asset structures. She serves on the Government of Bermuda’s Global FinTech Advisory Board.

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