Comments to Federal Reserve Main Street Lending Program
On April 16, Troutman Sanders and Pepper Hamilton submitted a comment letter in response to the solicitation of comments on the
Main Street Lending Program announced by the Federal Reserve and the U.S. Department of the Treasury on April 9, 2020 and the related Main Street New Loan Facility (MSNLF) and Main Street Expanded
Loan Facility (MSELF) term sheets. Our firms have been working closely together as we keep up with the latest developments with this complex legislation for our clients. We are quite familiar with customary terms and provisions
in lending facilities as well as the issues and concerns lenders and mid-size businesses seeking to participate in the Main Street Lending Program face.
While we applaud the efforts of the Federal Reserve and U.S. Department of the Treasury to bolster the economy and ensure that credit continues to flow to small and mid-sized businesses in these unprecedented times, as
outlined in our comment letter, there are many uncertainties and issues raised by the MSNLF and MSELF term sheets that will need to be resolved before these loan facilities can achieve their stated goals.
We believe the following items need clarification and/or modifications:
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EBITDA and size limitations,
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upsized tranche loan eligibility,
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eligible lenders, size and U.S. eligibility components,
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exceptions to dividend restrictions, lender attestations, voting rights, assignability and lender liability and certainty.
Our full letter can be viewed here.