United States: COVID-19 - Federal Reserve issues new Term Sheets and Frequently Asked Questions (FAQs) regarding Main Street Lending Program

In brief

Analysis of the information included in Federal Reserve's new Term Sheets and Frequently Asked Questions (FAQs) regarding Main Street Lending Program.


Contents

On June 8, 2020, the Federal Reserve issued new term sheets for the three Main Street lending facilities,[1] which replace the term sheets issued on April 30, 2020, and new FAQs regarding the Main Street Program, which replace the FAQs issued on May 27, 2020.

The Main Street Lending Program is intended to provide credit to small and medium-sized US businesses that were in sound financial condition before the COVID-19 pandemic.

The program includes three loan facilities, the Main Street New Loan Facility (MSNLF), the Main Street Expanded Loan Facility (MSELF) and the Main Street Priority Loan Facility (MSPLF).  All three facilities are being provided under Section 13(3) of the Federal Reserve Act.  Each facility is structured so that the Federal Reserve Bank of Boston (FRBB) will lend to a single special purpose vehicle (SPV) on a recourse basis.  The SPV will purchase participations in eligible loans made by eligible lenders.

Authors: José Antonio MoránCraig RoederJ. Brooke MestreMatthew Nochowitz and Carlos Suarez.

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1 See Main Street New Loan Facility Term Sheet, Main Street Expanded Loan Facility Term Sheet and Main Street Priority Loan Facility Term Sheet.

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