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Yield Maintenance - McGuireWoods EPISODE 1, 6th July 2020
The Ins and Outs of the Main Street Lending Program
00:00:00 00:43:39

The Ins and Outs of the Main Street Lending Program

As businesses begin resuming operations, the debt industry is receiving increased attention, with entities seeking liquidity and financial needs due to COVID-19. Apart from private financing and nontraditional lending, the Federal government is also rolling out programs to stabilize and boost enterprise. If you’re a business looking for additional capital or a lender interested in the trends in the industry, this podcast is for you.

In this inaugural episode of Yield Maintenance, host Brian Coughlan is joined by Clayton Stallbaumer, a McGuireWoods debt finance partner in the Chicago office, to discuss the Main Street Lending Program (MSLP). This new debt-focused stimulus from the Federal Reserve is an emergency credit lending program for businesses that were in sound financial condition before the pandemic struck.

Clayton goes into detail on what the program is, how it operates, the role of the Fed and eligible lenders, and the different facilities that are offered under the program. Clayton and Brian also explore possible issues and risks and the current interest from lenders and borrowers. Because the lenders are expected to do their own underwriting and use their own loan documents (other than certain form documents issued by the Fed), documentation will vary and industry-wide consensus is unlikely. Additionally, the restrictions on the borrower side may make the program less appealing than it initially appeared to be, particularly for private equity-backed businesses.

The MSLP went live on July 6, 2020 (after this episode was recorded), and it is and will continue to be a notable talking point among different stakeholders in the industry. Whether you’re a borrower or lender, now is the perfect time to initiate conversations with your contacts about the MSLP and the types of credit and loans that are available.

 

Episode highlights

Overview of the MSLP(1:57)

When the MLSP will go live (8:35)

Demand on the lender and borrower side (13:39)

Lender capability to provide desired MSLP loans (19:24)

Types of amendments and documentation (22:38)

Effect of MSLP on direct lenders (26:26)

Risk to direct lenders (31:18)

Possible lender issues (35:08)

Inter lender dynamic (39:19)

Final insight on the MSLP (40:12)

We appreciate you joining us on this episode of Across the Table. To learn more about today’s discussion or to contact us, please visit our website at mcguirewoods.com.

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This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.