The Treasury Department and Federal Reserve Board of Governors are leveraging the existing powers of the Federal Reserve under §13(3) of the Federal Reserve Act to provide credit to private enterprises under the “exigent” circumstances created by the COVID-19 pandemic.
In addition to the programs established and the powers granted as part of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), the Treasury Department and Federal Reserve Board of Governors are leveraging the existing powers of the Federal Reserve under §13(3) of the Federal Reserve Act to provide credit to private enterprises under the “exigent” circumstances created by the COVID-19 pandemic. On Thursday, April 9, 2020, they announced that they will establish two new facilities to support lending to midsized businesses that are adversely affected by the COVID-19 pandemic: (1) the Main Street New Loan Facility and (2) the Main Street Expanded Loan Facility (collectively, the facilities). The Main Street New Loan Facility will finance new loans originated on or after April 8, 2020 (new loans). The Main Street Expanded Loan Facility will finance the extension of additional credit (an upsized tranche) with respect to loans originated prior to April 8, 2020. Included in the announcement were “term sheets” that, by their nature, are not exhaustive of the details of the facilities.