| Explanation of Program |
The MSNLF provides for new loans to Borrowers whose debt to EBITDA multiple would be no more than 4x after obtaining the loan. |
The MSPLF provides for new loans to Borrowers whose debt to EBITDA multiple would be no more than 6x after obtaining the loan. |
The MSELF provides for new tranches to existing loans (originated before April 24, 2020) for Borrowers whose debt to EBITDA multiple would be no more than 6x after obtaining the loan. |
| Eligibility |
- Not more than 15,000 employees or $5 billion in 2019 annual revenue
- Must be established prior to March 13, 2020
- Must be organized under laws of the U.S. with no more than 49% foreign ownership.
- Must have significant operations and majority of employees in the U.S.
- Must not be an ineligible business under 13 C.F.R 120.110 (b)-(j) and (m)-(s)
- Must not have received specific support pursuant to the Coronavirus Economic Stabilization Act of 2020 (Subtitle A of Title IV of the CARES Act). (Borrowers who have received PPP loans are permitted to borrow under the Main Street Lending Program)
- Must not have participated in the Federal Reserve’s Primary Market Corporate Credit Facility
- May participate in only one of MSNLF, MSPLF and MSELF.
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| Loan Term |
4-year maturity |
4-year maturity for the MSELF tranche |
Principal amortization of:
- 33.3% at the end of the second year
- 33.3% at the end of the third year
- 33.3% upon maturity (at the end of the fourth year)
|
Principal amortization of
- 15% at the end of the second year
- 15% at the end of the third year
- 70% at maturity (at the end of the fourth year)
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| Loan Amount |
Minimum Loan Size: $500,000 Maximum Loan Size: the lesser of:
- $25 million
- Loan Amount + Outstanding undrawn debt does not exceed 4x EBITDA
|
Minimum Loan Size: $500,000 Maximum Loan Size: the lesser of:
- $25 million
- Loan Amount + Outstanding undrawn debt does not exceed 6x EBITDA
|
Minimum Loan Size: $10,000,000 Maximum Loan Size:
the least of:
- $200 million
- 35% of Borrower's outstanding and undrawn available debt that is equal in priority with the Loan and equivalent in secured status (i.e., secured or unsecured).
- Loan Amount + Outstanding undrawn debt does not exceed 6x EBITDA
|
| Interest Rate |
LIBOR + 3%. |
| Loan Fees |
No prepayment penalty |
Transaction fee of 1% of the principal amount of the loan at the time of origination
Origination fee of up to 1% of the principal amount of the loan at the time of origination |
Transaction fee of .75% of the principal amount of the MSELF tranche at the time of origination
Origination or "Loan Upsizing" fee of up to .75% of the principal amount of the MSELF tranche at the time of upsizing. |
| Security |
Loans may be secured or unsecured. |
The MSELF tranche may be secured or unsecured, but if other tranches of the loan are secured, then the MSELF tranche must be secured on a pro rata basis. |
| Payment Deferral |
Principal and interest is deferred for one year (unpaid interest will be capitalized) |
| Forgiveness |
None |
| Employment & Payroll |
Borrower must make commercially reasonable efforts to maintain its payroll and retain its employees while the Loan is outstanding |
| Compensation Limits |
Until 1 year after the loan is no longer outstanding, no officer or employee of Borrower whose total compensation exceeded $425,000 in 2019 may receive from the Borrower:
- during any 12 consecutive month period, total compensation exceeding the total compensation she/he received from the Borrower in 2019; or
- severance pay or other termination benefits from Borrower exceeding twice the maximum total compensation she/he received from the borrower in 2019
Until 1 year after the loan is no longer outstanding, no officer or employee of Borrower whose total compensation exceeded $3 million in 2019 may receive from Borrower during any 12 consecutive month period, total compensation exceeding the sum of:
- $3 million; and
- 50% of the excess over $3 million of the total compensation received by the officer or employee from Borrower in 2019.
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| Stock Repurchase Limits |
Until 1 year after the loan is no longer outstanding, the Borrower may not repurchase any equity security of Borrower or any parent company of Borrower if such equity security is listed on a national securities exchange, unless there is a contractual obligation to do so that was in effect on March 27, 2020 |
| Capital Distribution Limits |
No Borrower may pay dividends or distributions until 1 year after the loan is no longer outstanding, except that an S corporation or other tax pass-through entity that is a Borrower may make distributions to the extent reasonably required to cover its owners’ tax obligations in respect of the Borrower’s earnings |
| Underwriting |
Lenders are expected to assess each potential borrower’s financial condition at the time of application |
| Repayment of Other Debt |
Borrower must commit to refrain from repaying the principal balance of, or interest on, any debt until the Loan is repaid in full, unless such payment is mandatory and due |
Borrower must commit to refrain from repaying the principal balance of, or interest on, any debt until the Loan is repaid in full, unless the debt or interest payment is mandatory and due. But Borrower may, at the time of Loan origination, refinance existing debt owed by Borrower to a lender that is not the MSPLF Lender. |
Borrower must commit to refrain from repaying the principal balance of, or paying any interest on, any debt until the Loan is repaid in full, unless such payment is mandatory and due or in the case of default and acceleration. |
| Priority as to Other Debt |
At the time of origination and during the Term, the Loan must not be contractually subordinated in terms of priority to any of the Borrower’s other loans or debt instruments |
At the time of origination and while the Loan is outstanding, the Loan must be senior to or equal with, in terms of priority and security, the Borrower’s other loans or debt instruments, other than mortgage debt. |
| Borrower Risk Rating |
Any other Borrower loans outstanding with the Lender as of December 31, 2019 must have had an internal risk rating equivalent to a “pass” in the Federal Financial Institutions Examination Council’s supervisory rating system on that date |
The Loan must have had an internal risk rating equivalent to a “pass” in the Federal Financial Institutions Examination Council’s supervisory rating system as of December 31, 2019. |
| Borrower Certification as to Financial Viability |
Borrower must certify it has a reasonable basis to believe, as of the date of origination and after giving effect to the Loan, that it has the ability to meet its financial obligations for at least the next 90 days and does not expect to file for bankruptcy during that time period |
Borrower must certify it has a reasonable basis to believe, as of the date of upsizing and after giving effect to the upsizing of the Loan, that it has the ability to meet its financial obligations for at least the next 90 days and does not expect to file for bankruptcy during that time period |
| Lender Certification as to Calculation of EBITDA |
The Lender must certify that its methodology for calculating Borrower’s 2019 adjusted EBITDA is the same methodology it previously used for adjusting EBITDA when extending credit to the Borrower or similarly situated borrowers on or before April 24, 2020 |