Reed Smith Client Alerts

On June 8, 2020, the Federal Reserve released further guidance on the Main Street Lending Program (the Program), updated its frequently asked questions (the FAQs), and provided updated term sheets for the Program’s three facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF).

Authors: Daniel Teplin Tyrone M. Johnson McKenna E. Andrepont

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Updated Program terms

The Federal Reserve made the following changes to its term sheets, which can be found at FederalReserve.gov:

  • Term. The term of each loan option has been increased to five years, from the previous four-year term.
  • Principal repayment. The repayment of principal payments for each loan option has been deferred for two years, from the previous one-year deferral.
  • Principal amortization. The principal amortization of each loan option has been adjusted to 15 percent at the end of the third year, 15 percent at the end of the fourth year, and a balloon payment of 70 percent at maturity at the end of the fifth year.
  • Minimum loan size. The minimum loan size for an MSNLF loan and an MSPLF loan has been lowered to $250,000, from the previous $500,000.
  • Maximum loan size. The maximum loan size of each loan option has been increased (see chart below).
  • Loan participation. The Main Street Lending Program special purpose vehicle (the Main Street SPV) will purchase a 95 percent participation in each loan option.