Main Street Lending Program Comments Due April 16

Main Street New Loan Facility

Main Street Expanded Loan Facility

Eligible Borrower

• Businesses with up to 10,000 employees or up to $2.5 billion in 2019 annual revenues[2]
• Business must be created or organized in or under the laws of the U.S.
• Must have significant operations and employees in the U.S.

Eligible Lender

• U.S. insured depository institutions
• U.S. bank holding companies
• U.S. savings and loan holding companies
• Eligible lenders would then retain a 5% percent share of the loans, selling a 95% participation to the SPV established by the Federal Reserve.

Eligible Loan

New unsecured term loan originated on or after April 8, 2020.

Existing term loan originated before April 8, 2020.

Loan Amount

• Minimum amount: $1M
• Maximum amount: $25M or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed 4x 2019 EBITDA

• Minimum amount: $1M
• Maximum amount: $150M, 30% of Borrower’s existing outstanding and committed but undrawn bank debt or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed 6x 2019 EBITDA

Restrictions on Use of Proceeds

• Loan must not be used to repay or refinance pre-existing loans or lines of credit made by the lender to the borrower (including the pre-existing portion of the eligible loan if under the Main Street Expanded Loan Facility).
• Proceeds may not be used to repay other loan balances.
• Borrower must not repay other debt of equal or lower priority, with the exception of mandatory principal payments, unless the borrower has first repaid the eligible loan in full.
• Borrower may not seek to cancel or reduce any of its outstanding lines of credit with the lender or any other lender
• Lender may not cancel or reduce any existing lines of credit outstanding to the borrower..

Rate

Adjustable interest rate of the Secured Overnight Financing Rate (SOFR) + 250-400 bps

Maturity

4 year

Deferral?

Amortization of principal and interest is deferred for one year.

Secured?

Unsecured

Secured or Unsecured (dependent on prior loan)

Loan Forgiveness

No

Lender Fees

• Lender will pay the SPV a facility fee of 100 bps of the principal amount of the loan participation purchased by the SPV.
• Lender may pass on this fee to the borrower.

N/A

Borrower Fees

Borrower will pay the lender an origination/upsizing fee of 100 bps of the principal amount of the eligible loan.

Termination

• The SPV will cease purchasing participations in eligible loans on September 30, 2020, unless the FRB and the Treasury Department extend the Main Street Lending Program.
• The Federal Reserve will continue to fund the SPV after such date until the SPV’s underlying assets mature or are sold.

Capital Distribution Restrictions

• During the term of the loan plus one year, businesses may not repurchase an equity security that is listed on a national securities exchange of the business or any parent company of the business, unless required by contract
• During the term of the loan plus one year, the business may not pay dividends or make other capital distributions with respect to the common stock of the business

Compensation Restrictions

• During the term of the loan plus one year, salaries for critical businesses are limited such that—Officers Making Over $425,000: (1) no officer or employee whose total compensation exceeded $425,000 in calendar year 2019 will receive: (A) compensation greater than what they received calendar year 2019; or (B) a severance package twice their 2019 pay.
• Officers Making Over $3 million: (2) no officer or employee of the eligible business whose total compensation exceeded $3 million in calendar year 2019 may receive during any 12 consecutive months of such period total compensation in excess of the sum of: $3 million plus half of any total over $3 million.

Required Certifications

• Borrower must attest that it requires financing due to the exigent circumstances presented by the COVID-19 pandemic, and that, using the proceeds of the eligible loan, it will make reasonable efforts to maintain its payroll and retain its employees during the term of the eligible loan
• Borrower must attest that it meets the maximum EBITDA leverage conditions.
• Lender and borrower will each be required to certify that the entity is eligible to participate in the applicable facility, including in light of the conflicts of interest prohibition in section 4019(b) of the CARES Act.

Other

• Borrower may only participate in one Main Street Lending Facility
• Borrower may also take out PPP Loan