This past week the Federal Reserve released details on its Main Street Lending Facilities (“MLSF”) which both expanded and restricted MLSF’s original terms announced April 9.  Here are highlights:

  1. Fed added a “Priority” facility to the “New” and “Expanded” facilities. Priority loans will have larger lender risk retention (15% versus 5% under New and Expanded Facilities) and will have a balloon payment structure with 70% of the payment due in the 4th, final year (versus equal payments in years 2-4 under the “New” option). “Expanded” option also includes a balloon structure. All three types of facilities exempt payments in the first year.
  2. MSLF’s minimum loan size is now lowered to $500,000 under a “Priority” facility but raised to $10MM for “Expanded facility (which is now maxed out at $200MM versus the original $150MM or 35% of outstanding debt—an increase over the original 30%).
  3. Expanded eligibility for companies with (i) less than 15,000 employees from the original 10,000, or (ii) less than $5B in annual revenues from the original $2.5B.
  4. MSLF excludes hedge funds and private equity firms from the program though private equity-owned firms may still be eligible.

The full announcement with term sheets and FAQ may be found at: