McGuireWoods Charlotte senior counsel Staci Rosche wrote a May 6, 2020, column for The Secured Lender on updates the Federal Reserve made to its Main Street Loan Program (MSLP).
In it, Rosche wrote that asset-based lenders will need to consider the impact of MSLP terms on existing financing structures, “such as the pari passu treatment of collateral, which could dilute existing lender security in some cases, the continued reliance on EBITDA and risk ratings as metrics for determining borrower eligibility and the restrictions on assignments by MSLP lenders.”
Rosche included a chart outlining key differences among the MSLP’s three facilities and noted where original terms have changed, including the addition of the Main Street Priority Loan Facility. She also discussed several unresolved concerns in the MSLP for asset-based lenders, as well as revisions supported by the Secured Finance Network.