On April 30, 2020, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued revisions to the Main Street Lending Program (the “MSLP”), which included revisions to the certifications and covenants that will be required of both Eligible Lenders (“Eligible Lenders”) and Eligible Borrowers (“Eligible Borrowers”) under the MSLP facilities. Below, we review these requirements and analyze what they may mean to market participants.
MSLP Certifications and Covenants
The MSLP consists of three separate facilities: (i) the Main Street New Loan Facility (“MSNLF”), (ii) the Main Street Priority Loan Facility (“MSPLF”) and (iii) the Main Street Expanded Loan Facility (“MSELF”). While most of the required certifications and covenants are common to each of the three facilities, there are certain differences, which we outline below. In addition, these required certifications and covenants are typically not those incorporated into existing loan agreements, and the Federal Reserve has yet to provide additional guidance regarding how these certifications and covenants should be documented, as discussed in more detail below.
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