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Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act
May 15, 2020
Overview
The Board of Governors of the Federal Reserve System (Board) is providing
the following updates concerning certain lending facilities established by the Board
under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343). Pursuant to
section 13(3)(C) of the Federal Reserve Act, the Board must provide the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives (the
Committees) an initial report regarding each facility established under
section 13(3) and periodic updates at least every 30 days thereafter. This report
provides the first periodic update for (1) the Municipal Liquidity Facility (MLF),
(2) the Main Street New Loan Facility (MSNLF), (3) the Main Street Expanded
Loan Facility (MSELF), and (4) the Paycheck Protection Program Liquidity
Facility (PPPLF).
In addition to the MLF, MSNLF, MSELF, and PPPLF, the Board also has
authorized the establishment of the following credit facilities under section 13(3)
of the Federal Reserve Act: the Commercial Paper Funding Facility, the Primary
Dealer Credit Facility, the Money Market Mutual Fund Liquidity Facility, the
Primary Market Corporate Credit Facility, the Secondary Market Corporate
Credit Facility, the Term Asset-Backed Securities Loan Facility, and the Main
Street Priority Loan Facility (MSPLF). Periodic updates concerning these
facilities will be provided at least every 30 days, in accordance with section 13(3)
of the Federal Reserve Act.
A. Municipal Liquidity Facility
On April 8, 2020, the Board authorized the establishment of the MLF.
The MLF is intended to support lending to state, city, and county governments
and certain multistate entities. The Federal Reserve Bank of New York will
operate the MLF.
The Board revised the terms of the MLF on April 27, 2020, and May 11,
2020. The current terms can be found in appendix A. Additional information
about the MLF can be found on the Board’s public website at
1

https://www.federalreserve.gov/monetarypolicy/muni.htm.
Update. As of May 6, 2020, the MLF was not yet operational.
Accordingly, there are no transaction data to report.
As described in the Board’s initial report to Congress regarding the MLF,
the MLF includes features that are intended to mitigate risk to the Federal
Reserve. The Board continues to expect that the MLF will not result in losses to
the Federal Reserve.
B. Main Street New Loan Facility
On April 8, 2020, the Board authorized the establishment of the MSNLF.
The MSNLF is intended to facilitate lending to small- and medium-sized
businesses by eligible lenders. The Federal Reserve Bank of Boston (FRBB) will
operate the MSNLF.
On April 30, 2020, the terms of the MSNLF were revised. The amended
terms can be found in appendix B. Additional information about the MSNLF can
be found on the Board’s public website at
https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm.
Update. As of May 6, 2020, the MSNLF was not yet operational.
Accordingly, there are no transaction data to report.
As described in the Board’s initial report to Congress regarding the MSNLF,
the MSNLF includes features that are intended to mitigate risk to the Federal
Reserve. The Board continues to expect that the MSNLF will not result in losses
to the Federal Reserve.
C. Main Street Expanded Loan Facility
On April 8, 2020, the Board authorized the establishment of the MSELF.
The MSELF is intended to facilitate lending to small- and medium-sized
businesses by eligible lenders. The FRBB will operate the MSELF.
On April 30, 2020, the terms of the MSELF were revised. The amended
terms can be found in appendix C. Additional information about the MSELF can
be found on the Board’s public website at
2

https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm.
Update. As of May 6, the MSELF was not yet operational. Accordingly,
there are no transaction data to report.
As described in the Board’s initial report to Congress regarding the
MSELF, the MSELF includes features that are intended to mitigate risk to the
Federal Reserve. The Board continues to expect that the MSELF will not result
in losses to the Federal Reserve.
D. Paycheck Protection Program Liquidity Facility
On April 8, 2020, the Board authorized each of the 12 Federal Reserve
Banks to establish and operate the PPPLF. The PPPLF offers a source of
liquidity to the financial institution lenders that lend to small businesses through
the Small Business Administration’s (SBA) Paycheck Protection Program (PPP).
On April 30, 2020, the terms of the PPPLF were revised to reflect the
following:
 The scope of eligible institutions was expanded from depository
institutions to lenders that are eligible to originate PPP loans, and
the Board identified the Federal Reserve Bank from which each
eligible institution should borrow as follows:
Eligible institution type

Federal Reserve Bank

Depository institution or credit union.

The Federal Reserve Bank in whose District the
eligible depository institution is located (see
Regulation D, 12 CFR 204.3(g)(1)–(2), for
determining location).

Community development financial institution as
defined in 12 U.S.C. § 4702 and certified by the
U.S. Treasury (that is not a depository institution
or credit union).

Federal Reserve Bank of Cleveland.

Member of the Farm Credit System (that is not a
depository institution or credit union).

Federal Reserve Bank of Minneapolis.

Small business lending companies as defined in
13 CFR 120.10 (that is not a depository institution
or credit union).

Federal Reserve Bank of Minneapolis.

Other eligible institution type not listed above.

Federal Reserve Bank of San Francisco.

 The scope of eligible collateral was clarified to include SBAguaranteed PPP loans that a lender has originated or purchased.
 The facility was renamed the Paycheck Protection Program
Liquidity Facility, from Paycheck Protection Program Lending
Facility.
Additional information about the PPPLF can be found on the Board’s
public website at https://www.federalreserve.gov/monetarypolicy/ppplf.htm.
Update. As of May 6, 2020:
 The total outstanding amount of all advances under the PPPLF was
$ 29,180,979,329.85.
 The value of the collateral pledged to secure outstanding advances
was $29,180,979,329.85.
 The amount of interest, fees, and other revenue or items of value
received under the facility, reported on an accrual basis, was
$2,541,470.23.
 As described in the Board’s initial report to Congress regarding the
PPPLF, the PPPLF includes features that are intended to mitigate
risk to the Federal Reserve. The Board continues to expect that the
PPPLF will not result in losses to the Federal Reserve.
Transaction-specific disclosures for the PPPLF can be found in
appendix D.

Appendix A—MLF Term Sheet
Effective May 11, 20201
Facility: The Municipal Liquidity Facility (“Facility”), which has been authorized under
Section 13(3) of the Federal Reserve Act, will support lending to U.S. states and the District of
Columbia (together, “States”), U.S. cities with a population exceeding 250,000 residents2
(“Cities”), U.S. counties with a population exceeding 500,000 residents3 (“Counties”), and
Multi-State Entities. Under the Facility, the Federal Reserve Bank of New York (“Reserve
Bank”) will commit to lend to a special purpose vehicle (“SPV”) on a recourse basis. The SPV
will purchase Eligible Notes directly from Eligible Issuers at the time of issuance. The Reserve
Bank will be secured by all the assets of the SPV. The Department of the Treasury, using funds
appropriated to the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid,
Relief, and Economic Security Act, will make an initial equity investment of $35 billion in the
SPV in connection with the Facility. The SPV will have the ability to purchase up to $500
billion of Eligible Notes.
Eligible Notes: Eligible Notes are tax anticipation notes (TANs), tax and revenue anticipation
notes (TRANs), bond anticipation notes (BANs), and other similar short-term notes issued by
Eligible Issuers, provided that such notes mature no later than 36 months from the date of
issuance. In each case, a note’s eligibility is subject to review by the Federal Reserve. Relevant
legal opinions and disclosures will be required as determined by the Federal Reserve prior to
purchase.
Eligible Issuer: An Eligible Issuer is a State, City, or County (or, subject to Federal Reserve
review and approval, an entity that issues securities on behalf of the State, City, or County for the
purpose of managing its cash flows) or a Multi-State Entity. An Eligible Issuer that is not a
Multi-State Entity must have been rated at least BBB-/Baa3 as of April 8, 2020, by two or more
major nationally recognized statistical rating organizations (“NRSROs”). An Eligible Issuer that
is not a Multi-State Entity and that was rated at least BBB-/Baa3 as of April 8, 2020, but is
subsequently downgraded, must be rated at least BB-/Ba3 by two or more major NRSROs at the
time the Facility makes a purchase. An Eligible Issuer that is a Multi-State Entity must have
been rated at least A-/A3 as of April 8, 2020, by two or more major NRSROs. A Multi-State
Entity that was rated at least A-/A3 as of April 8, 2020, but is subsequently downgraded, must be
rated at least BBB-/Baa3 by two or more major NRSROs at the time the Facility makes a
purchase. Notwithstanding the foregoing, if a State, City, County, or Multi-State Entity was
rated by only one major NRSRO as of April 8, 2020, it may be an Eligible Issuer under the
Facility if (i) the rating was at least BBB-/Baa3 (for a State, City, or County) or A-/A3 (for a
The Board of Governors of the Federal Reserve System (“Board”) and Secretary of the Treasury may make
adjustments to the terms and conditions described in this term sheet. Any changes will be announced on the Board’s
website.
2
Source: U.S. Census Bureau, Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2018, as of
April 6, 2020 (https://www.census.gov/data/tables/time-series/demo/popest/2010s-total-cities-and-towns.html).
3
Source: U.S. Census Bureau, “Population, Population Change, and Estimated Components of Population Change:
April 1, 2010 to July 1, 2019 (CO-EST2019-alldata)” dataset as of April 6, 2020
(https://www.census.gov/data/datasets/time-series/demo/popest/2010s-countiestotal.html#par_textimage_739801612.)
1

Multi-State Entity); (ii) the State, City, County, or Multi-State Entity is rated by at least two
major NRSROs at the time the Facility makes a purchase; and (iii) such ratings are at least BB/Ba3 (for a State, City, or County) or BBB-/Baa3 (for a Multi-State Entity).
Only one issuer per State, City, County, or Multi-State Entity is eligible; provided that the
Federal Reserve may approve one or more additional issuers per State, City, or County to
facilitate the provision of assistance to political subdivisions and other governmental entities of
the relevant State, City, or County.
Multi-State Entity: A Multi-State Entity is an entity that was created by a compact between
two or more States, which compact has been approved by the United States Congress, acting
pursuant to its power under the Compact Clause of the United States Constitution.
Security for Eligible Notes: Note security will be subject to review and approval by the Federal
Reserve. The source of repayment and security for Eligible Notes will depend on the applicable
constitutional and statutory provisions governing the Eligible Issuer and should be generally
consistent with the source of repayment and strongest security typically pledged to repay
publicly offered obligations of the Eligible Issuer. Eligible Notes issued by Eligible Issuers that
are not Multi-State Entities will generally be expected to represent general obligations of the
Eligible Issuer, or be backed by tax or other specified governmental revenues of the applicable
State, City, or County. If the Eligible Issuer is an authority, agency, or other entity of a State,
City, or County, such Eligible Issuer must either commit the credit of, or pledge revenues of, the
State, City, or County, or the State, City, or County must guarantee the Eligible Notes issued by
such issuer. If the Eligible Issuer is a Multi-State Entity, the Eligible Notes will be expected to
be parity obligations of existing debt secured by a senior lien on the Multi-State Entity’s gross or
net revenues.
Limit per State, City, County, and Multi-State Entity: The SPV may purchase Eligible Notes
issued by or on behalf of a State, City, or County in one or more issuances of up to an aggregate
amount of 20% of the general revenue from own sources and utility revenue of the applicable
State, City, or County government for fiscal year 2017.4 The SPV may purchase Eligible Notes
issued by a Multi-State Entity in one or more issuances of up to an aggregate amount of 20% of
the Multi-State Entity’s gross revenue as reported in its audited financial statements for fiscal
year 2019. States may request that the SPV purchase Eligible Notes in excess of the applicable
limit in order to assist political subdivisions and other governmental entities that are not eligible
for the Facility.
Pricing: The methodology for pricing is set forth in the attached Pricing Appendix.
Origination Fee: Each Eligible Issuer that participates in the Facility must pay an origination
fee equal to 10 basis points of the principal amount of the Eligible Issuer’s notes purchased by
the SPV. The origination fee may be paid from the proceeds of the issuance.

Source: U.S. Census Bureau, 2017 State & Local Government Historical Datasets and Tables, as of April 6, 2020
(https://www.census.gov/data/datasets/2017/econ/local/public-use-datasets.html).

Prepayment Right: With the approval of the SPV, Eligible Notes purchased by the SPV may
be prepaid by the Eligible Issuer at any time, in whole or in part, at par (or, in the case of Eligible
Notes purchased at a premium, par plus unamortized premium) plus accrued interest, prior to
maturity.
Eligible Use of Proceeds: An Eligible Issuer may use the proceeds of Eligible Notes purchased
by the SPV to help manage the cash flow impact of income tax deferrals resulting from an
extension of an income tax filing deadline; deferrals or reductions of tax and other revenues or
increases in expenses related to or resulting from the COVID-19 pandemic; and requirements for
the payment of principal and interest on obligations of the Eligible Issuer or its political
subdivisions or other governmental entities. An Eligible Issuer (other than a Multi-State Entity)
may use the proceeds of the notes purchased by the SPV to purchase similar notes issued by, or
otherwise to assist, political subdivisions and other governmental entities of the relevant State,
City, or County for the purposes enumerated in the prior sentence.
Termination Date: The SPV will cease purchasing Eligible Notes on December 31, 2020,
unless the Board and the Treasury Department extend the Facility. The Reserve Bank will
continue to fund the SPV after such date until the SPV’s underlying assets mature or are sold.

Municipal Liquidity Facility—Pricing Appendix
Tax-Exempt Eligible Notes: If interest on the Eligible Notes is excluded from gross income for
federal income tax purposes, pricing will be at a fixed interest rate based on a comparable
maturity overnight index swap (“OIS”) rate plus the applicable spread based on the long-term
rating of the security for the Eligible Notes as follows:
Rating*
Spread (bps)
AAA/Aaa
150
AA+/Aa1
170
AA/Aa2
175
AA-/Aa3
190
A+/A1
240
A/A2
250
A-/A3
265
BBB+/Baa1
325
BBB/Baa2
340
BBB-/Baa3
380
Below Investment
590
Grade
* To account for split ratings across different credit rating agencies, an average rating generally
will be calculated.
Taxable Eligible Notes: If interest on the Eligible Notes is not excluded from gross income for
federal income tax purposes, pricing will be at a fixed interest rate that is calculated by (i) first,
adding the comparable maturity OIS rate to the spread in the above table that would apply to
such Eligible Notes if the Eligible Notes were tax-exempt Eligible Notes, and (ii) second,
dividing the sum calculated under clause (i) by 0.65.

Appendix B—MSNLF Term Sheet
Effective April 30, 20201
Program: The Main Street New Loan Facility (“Facility”), which has been authorized under
section 13(3) of the Federal Reserve Act, is intended to facilitate lending to small and mediumsized Businesses by Eligible Lenders. Under the Facility, the Main Street Priority Loan Facility
(“MSPLF”), and the Main Street Expanded Loan Facility (“MSELF”), the Federal Reserve Bank
of Boston (“Reserve Bank”) will commit to lend to a single common special purpose vehicle
(“SPV”) on a recourse basis. The SPV will purchase 95% participations in Eligible Loans from
Eligible Lenders. Eligible Lenders will retain 5% of each Eligible Loan. The Department of the
Treasury, using funds appropriated to the Exchange Stabilization Fund under section 4027 of the
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), will make a $75 billion
equity investment in the single common SPV in connection with the Facility, the MSPLF, and
the MSELF. The combined size of the Facility, the MSPLF, and the MSELF will be up to
$600 billion.
Eligible Lenders: An Eligible Lender is a U.S. federally insured depository institution
(including a bank, savings association, or credit union), a U.S. branch or agency of a foreign
bank, a U.S. bank holding company, a U.S. savings and loan holding company, a U.S.
intermediate holding company of a foreign banking organization, or a U.S. subsidiary of any of
the foregoing.
Eligible Borrowers: An Eligible Borrower is a Business2 that:
1. was established prior to March 13, 2020;
2. is not an Ineligible Business;3
3. meets at least one of the following two conditions: (i) has 15,000 employees or fewer, or
(ii) had 2019 annual revenues of $5 billion or less;
4. is created or organized in the United States or under the laws of the United States with
significant operations in and a majority of its employees based in the United States;
5. does not also participate in the MSPLF, the MSELF, or the Primary Market Corporate
Credit Facility; and

The Board of Governors of the Federal Reserve System (“Board”) and the Secretary of the Treasury may
make adjustments to the terms and conditions described in this term sheet. Any changes will be announced on
the Board’s website.
2 For purposes of the Facility, a Business is an entity that is organized for profit as a partnership; a limited
liability company; a corporation; an association; a trust; a cooperative; a joint venture with no more than
49 percent participation by foreign business entities; or a tribal business concern as defined in 15 U.S.C.
§ 657a(b)(2)(C), except that “small business concern” in that paragraph should be replaced with “Business” as
defined herein. Other forms of organization may be considered for inclusion as a Business under the Facility
at the discretion of the Federal Reserve.
3 For purposes of the Facility, an Ineligible Business is a type of business listed in 13 CFR 120.110(b)-(j) and
(m)-(s), as modified by regulations implementing the Paycheck Protection Program established by section
1102 of the CARES Act (“PPP”) on or before April 24, 2020. The application of these restrictions to the
Facility may be further modified at the discretion of the Federal Reserve.
1

6. has not received specific support pursuant to the Coronavirus Economic Stabilization Act
of 2020 (Subtitle A of Title IV of the CARES Act).4
Eligible Loans: An Eligible Loan is a secured or unsecured term loan made by an Eligible
Lender(s) to an Eligible Borrower that was originated after April 24, 2020, provided that the loan
has all of the following features:
1. 4 year maturity;
2. principal and interest payments deferred for one year (unpaid interest will be capitalized);
3. adjustable rate of LIBOR (1 or 3 month) + 300 basis points;
4. principal amortization of one-third at the end of the second year, one-third at the end of
the third year, and one-third at maturity at the end of the fourth year;
5. minimum loan size of $500,000;
6. maximum loan size that is the lesser of (i) $25 million or (ii) an amount that, when added
to the Eligible Borrower’s existing outstanding and undrawn available debt, does not
exceed four times the Eligible Borrower’s adjusted 2019 earnings before interest, taxes,
depreciation, and amortization (“EBITDA”);5
7. is not, at the time of origination or at any time during the term of the Eligible Loan,
contractually subordinated in terms of priority to any of the Eligible Borrower’s other
loans or debt instruments; and
8. prepayment permitted without penalty.
Loan Classification: If the Eligible Borrower had other loans outstanding with the Eligible
Lender as of December 31, 2019, such loans 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.
Assessment of Financial Condition: Eligible Lenders are expected to conduct an assessment of
each potential borrower’s financial condition at the time of the potential borrower’s application.
Loan Participations: The SPV will purchase at par value a 95% participation in the Eligible
Loan. The SPV and the Eligible Lender will share risk in the Eligible Loan on a pari passu basis.
The Eligible Lender must retain its 5% of the Eligible Loan until it matures or the SPV sells all
of its participation, whichever comes first. The sale of a participation in the Eligible Loan to the
SPV will be structured as a “true sale” and must be completed expeditiously after the Eligible
Loan’s origination.
Required Lender Certifications and Covenants: In addition to other certifications required by
applicable statutes and regulations, the following certifications and covenants will be required
from Eligible Lenders:
 The Eligible Lender must commit that it will not request that the Eligible Borrower repay
debt extended by the Eligible Lender to the Eligible Borrower, or pay interest on such
4

For the avoidance of doubt, Businesses that have received PPP loans are permitted to borrow under the
Facility, provided that they are Eligible Borrowers.
5 The methodology used by the Eligible Lender to calculate adjusted 2019 EBITDA must be the methodology
it has previously used for adjusting EBITDA when extending credit to the Eligible Borrower or similarly
situated borrowers on or before April 24, 2020.






outstanding obligations, until the Eligible Loan is repaid in full, unless the debt or interest
payment is mandatory and due, or in the case of default and acceleration.
The Eligible Lender must commit that it will not cancel or reduce any existing committed
lines of credit to the Eligible Borrower, except in an event of default.
The Eligible Lender must certify that the methodology used for calculating the Eligible
Borrower’s adjusted 2019 EBITDA for the leverage requirement in section 6(ii) of the
Eligible Loan paragraph above is the methodology it has previously used for adjusting
EBITDA when extending credit to the Eligible Borrower or similarly situated borrowers
on or before April 24, 2020.
The Eligible Lender must certify that it is eligible to participate in the Facility, including
in light of the conflicts of interest prohibition in section 4019(b) of the CARES Act.

Required Borrower Certifications and Covenants: In addition to other certifications required
by applicable statutes and regulations, the following certifications and covenants6 will be
required from Eligible Borrowers:
 The Eligible Borrower must commit to refrain from repaying the principal balance of, or
paying any interest on, any debt until the Eligible Loan is repaid in full, unless the debt or
interest payment is mandatory and due.
 The Eligible Borrower must commit that it will not seek to cancel or reduce any of its
committed lines of credit with the Eligible Lender or any other lender.
 The Eligible Borrower must certify that it has a reasonable basis to believe that, as of the
date of origination of the Eligible Loan and after giving effect to such loan, 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.
 The Eligible Borrower must commit that it will follow compensation, stock repurchase,
and capital distribution restrictions that apply to direct loan programs under section
4003(c)(3)(A)(ii) of the CARES Act, except that an S corporation or other tax passthrough entity that is an Eligible Borrower may make distributions to the extent
reasonably required to cover its owners’ tax obligations in respect of the entity’s
earnings.
 The Eligible Borrower must certify that it is eligible to participate in the Facility,
including in light of the conflicts of interest prohibition in section 4019(b) of the CARES
Act.
Retaining Employees: Each Eligible Borrower that participates in the Facility should make
commercially reasonable efforts to maintain its payroll and retain its employees during the time
the Eligible Loan is outstanding.
Transaction Fee: An Eligible Lender will pay the SPV a transaction fee of 100 basis points of
the principal amount of the Eligible Loan at the time of origination. The Eligible Lender may
require the Eligible Borrower to pay this fee.

An Eligible Lender is expected to collect the required certifications and covenants from each Eligible
Borrower at the time of origination of the Eligible Loan. Eligible Lenders may rely on an Eligible Borrower’s
certifications and covenants, as well as any subsequent self-reporting by the Eligible Borrower.

Loan Origination and Servicing Fees: An Eligible Borrower will pay an Eligible Lender an
origination fee of up to 100 basis points of the principal amount of the Eligible Loan at the time
of origination. The SPV will pay an Eligible Lender 25 basis points of the principal amount of
its participation in the Eligible Loan per annum for loan servicing.7
Facility Termination: The SPV will cease purchasing participations in Eligible Loans on
September 30, 2020, unless the Board and the Department of the Treasury extend the Facility.
The Reserve Bank will continue to fund the SPV after such date until the SPV’s underlying
assets mature or are sold.

Further information regarding credit administration and loan servicing will be made available on the Board’s
website.
7

Appendix C—MSELF Term Sheet
Effective April 30, 20201
Program: The Main Street Expanded Loan Facility (“Facility”), which has been authorized
under section 13(3) of the Federal Reserve Act, is intended to facilitate lending to small and
medium-sized Businesses by Eligible Lenders. Under the Facility, the Main Street Priority Loan
Facility (“MSPLF”), and the Main Street New Loan Facility (“MSNLF”), the Federal Reserve
Bank of Boston (“Reserve Bank”) will commit to lend to a single common special purpose
vehicle (“SPV”) on a recourse basis. The SPV will purchase 95% participations in the upsized
tranche of Eligible Loans from Eligible Lenders. Eligible Lenders will retain 5% of the upsized
tranche of each Eligible Loan. The Department of the Treasury, using funds appropriated to the
Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and Economic
Security Act (“CARES Act”), will make a $75 billion equity investment in the single common
SPV in connection with the Facility, the MSPLF, and the MSNLF. The combined size of the
Facility, the MSPLF, and the MSNLF will be up to $600 billion.
Eligible Lenders: An Eligible Lender is a U.S. federally insured depository institution
(including a bank, savings association, or credit union), a U.S. branch or agency of a foreign
bank, a U.S. bank holding company, a U.S. savings and loan holding company, a U.S.
intermediate holding company of a foreign banking organization, or a U.S. subsidiary of any of
the foregoing.
Eligible Borrowers: An Eligible Borrower is a Business2 that:
1. was established prior to March 13, 2020;
2. is not an Ineligible Business;3
3. meets at least one of the following two conditions: (i) has 15,000 employees or fewer, or
(ii) had 2019 annual revenues of $5 billion or less;
4. is created or organized in the United States or under the laws of the United States with
significant operations in and a majority of its employees based in the United States;
5. does not also participate in the MSPLF, the MSNLF, or the Primary Market Corporate
Credit Facility; and

6. has not received specific support pursuant to the Coronavirus Economic Stabilization Act
of 2020 (Subtitle A of Title IV of the CARES Act).4
Eligible Loans: An Eligible Loan is a secured or unsecured term loan or revolving credit facility
made by an Eligible Lender(s) to an Eligible Borrower that was originated on or before April 24,
2020, and that has a remaining maturity of at least 18 months (taking into account any
adjustments made to the maturity of the loan after April 24, 2020, including at the time of
upsizing), provided that the upsized tranche of the loan is a term loan that has all of the following
features:
1. 4 year maturity;
2. principal and interest payments deferred for one year (unpaid interest will be capitalized);
3. adjustable rate of LIBOR (1 or 3 month) + 300 basis points;
4. principal amortization of 15% at the end of the second year, 15% at the end of the third
year, and a balloon payment of 70% at maturity at the end of the fourth year;
5. minimum loan size of $10 million;
6. maximum loan size that is the lesser of (i) $200 million, (ii) 35% of the Eligible
Borrower’s existing outstanding and undrawn available debt that is pari passu in priority
with the Eligible Loan and equivalent in secured status (i.e., secured or unsecured), or
(iii) an amount that, when added to the Eligible Borrower’s existing outstanding and
undrawn available debt, does not exceed six times the Eligible Borrower’s adjusted 2019
earnings before interest, taxes, depreciation, and amortization (“EBITDA”);5
7. at the time of upsizing and at all times the upsized tranche is outstanding, the upsized
tranche is senior to or pari passu with, in terms of priority and security, the Eligible
Borrower’s other loans or debt instruments, other than mortgage debt; and
8. prepayment permitted without penalty.
Loan Classification: The Eligible 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.
Assessment of Financial Condition: Eligible Lenders are expected to conduct an assessment of
each potential borrower’s financial condition at the time of the potential borrower’s application.
Loan Participations: The SPV will purchase at par value a 95% participation in the upsized
tranche of the Eligible Loan, provided that it is upsized on or after April 24, 2020. The SPV and
the Eligible Lender will share risk in the upsized tranche on a pari passu basis. The Eligible
Lender must be one of the lenders that holds an interest in the underlying Eligible Loan at the
date of upsizing. The Eligible Lender must retain its 5% portion of the upsized tranche of the
Eligible Loan until the upsized tranche of the Eligible Loan matures or the SPV sells all of its
95% participation, whichever comes first. The Eligible Lender must also retain its interest in the
4

For the avoidance of doubt, Businesses that have received PPP loans are permitted to borrow under the
Facility, provided that they are Eligible Borrowers.
5 The methodology used by the Eligible Lender to calculate adjusted 2019 EBITDA must be the methodology
it previously used for adjusting EBITDA when originating or amending the Eligible Loan on or before
April 24, 2020.

underlying Eligible Loan until the underlying Eligible Loan matures, the upsized tranche of the
Eligible Loan matures, or the SPV sells all of its 95% participation, whichever comes first. Any
collateral securing the Eligible Loan (at the time of upsizing or on any subsequent date) must
secure the upsized tranche on a pro rata basis. The sale of a participation in the upsized tranche
of the Eligible Loan to the SPV will be structured as a “true sale” and must be completed
expeditiously after the Eligible Loan’s upsizing.
Required Lender Certifications and Covenants: In addition to other certifications required by
applicable statutes and regulations, the following certifications and covenants will be required
from Eligible Lenders:
 The Eligible Lender must commit that it will not request that the Eligible Borrower repay
debt extended by the Eligible Lender to the Eligible Borrower, or pay interest on such
outstanding obligations, until the upsized tranche of the Eligible Loan is repaid in full,
unless the debt or interest payment is mandatory and due, or in the case of default and
acceleration.
 The Eligible Lender must commit that it will not cancel or reduce any existing committed
lines of credit to the Eligible Borrower, except in an event of default.
 The Eligible Lender must certify that the methodology used for calculating the Eligible
Borrower’s adjusted 2019 EBITDA for the leverage requirement in section 6(iii) of the
Eligible Loan paragraph above is the methodology it previously used for adjusting
EBITDA when originating or amending the Eligible Loan on or before April 24, 2020.
 The Eligible Lender must certify that it is eligible to participate in the Facility, including
in light of the conflicts of interest prohibition in section 4019(b) of the CARES Act.
Required Borrower Certifications and Covenants: In addition to other certifications required
by applicable statutes and regulations, the following certifications and covenants6 will be
required from Eligible Borrowers:
 The Eligible Borrower must commit to refrain from repaying the principal balance of, or
paying any interest on, any debt until the upsized tranche of the Eligible Loan is repaid in
full, unless the debt or interest payment is mandatory and due.
 The Eligible Borrower must commit that it will not seek to cancel or reduce any of its
committed lines of credit with the Eligible Lender or any other lender.
 The Eligible Borrower must certify that it has a reasonable basis to believe that, as of the
date of upsizing of the Eligible Loan and after giving effect to such upsizing, 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.
 The Eligible Borrower must commit that it will follow compensation, stock repurchase,
and capital distribution restrictions that apply to direct loan programs under section
4003(c)(3)(A)(ii) of the CARES Act, except that an S corporation or other tax passthrough entity that is an Eligible Borrower may make distributions to the extent
reasonably required to cover its owners’ tax obligations in respect of the entity’s
earnings.
6

An Eligible Lender is expected to collect the required certifications and covenants from each Eligible
Borrower at the time of upsizing of the Eligible Loan. Eligible Lenders may rely on an Eligible Borrower’s
certifications and covenants, as well as any subsequent self-reporting by the Eligible Borrower.



The Eligible Borrower must certify that it is eligible to participate in the Facility,
including in light of the conflicts of interest prohibition in section 4019(b) of the CARES
Act.

Retaining Employees: Each Eligible Borrower that participates in the Facility should make
commercially reasonable efforts to maintain its payroll and retain its employees during the time
the upsized tranche of the Eligible Loan is outstanding.
Transaction Fee: An Eligible Lender will pay the SPV a transaction fee of 75 basis points of
the principal amount of the upsized tranche of the Eligible Loan at the time of upsizing. The
Eligible Lender may require the Eligible Borrower to pay this fee.
Loan Upsizing and Servicing Fees: An Eligible Borrower will pay an Eligible Lender an
origination fee of up to 75 basis points of the principal amount of the upsized tranche of the
Eligible Loan at the time of upsizing. The SPV will pay an Eligible Lender 25 basis points of the
principal amount of its participation in the upsized tranche of the Eligible Loan per annum for
loan servicing.7
Facility Termination: The SPV will cease purchasing participations in Eligible Loans on
September 30, 2020, unless the Board and the Department of the Treasury extend the Facility.
The Reserve Bank will continue to fund the SPV after such date until the SPV’s underlying
assets mature or are sold.

Further information regarding credit administration and loan servicing will be made available on the Board’s
website.
7

Appendix D—PPPLF Transaction-specific Disclosures
Transaction-specific disclosures regarding the PPPLF may be found in the attached spreadsheet.