Bank of Boston will commit to provide secured recourse financing to the SPV Loan Participant such that the combined amount of indirect financing that the SPV Loan Participant can provide to business entities under the Main Street Loan Facilities will be up to $ 600 billion . According to the Federal Reserve Main Street FAQ , the Federal Reserve and Treasury may adjust this amount in the future .
Pursuant to the PMCCF , Treasury will use funds appropriated to the Exchange Stabilization Fund under Section 4027 of the CARES Act and other existing appropriations to make a $ 75 billion equity investment in a special purpose vehicle in connection with the PMCCF and the SMCCF ( the “ SPV Purchaser ”). The Federal Reserve Bank of New York will commit to provide secured recourse financing to the SPV Purchaser such that the combined amount of funds available for the SPV Purchaser to use to purchase eligible bonds , syndicated loans and other instruments under the PMCCF and the SMCCF will be up to $ 750 billion . According to the New York Fed FAQ , ( i ) the initial allocation of the U . S . Treasury Department ’ s equity investment toward the PMCCF will be $ 50 billion ; and ( ii ) the SPV Purchaser will leverage Treasury ’ s equity at 10 to 1 when acquiring eligible investment grade corporate bonds and syndicated loans and 7 to 1 when acquiring eligible below investment grade corporate bonds and syndicated loans .
Treasury ’ s equity investments in the SPV Loan Participant and the SPV Purchaser are intended to provide “ first loss ” support to the Federal Reserve under the Main Street Loan Facilities , PMCCF and SMCCF in the event of credit losses on the financed assets held by the SPV Loan Participant and the SPV Purchaser .
Your Bracewell point of contact can help with any questions or further discuss any aspect of this summary or the Facilities and your proposed or actual participation in any capacity in a transaction under or affected by any Facility .
II . Main Street Loan Facilities
A . Eligible Borrowers : Any “ for profit ” entity that is a partnership , limited liability company , corporation , association , trust , cooperative , joint venture with no more than 49 % participation by foreign business entities , or a tribal business concern that :
1 . Was established before March 13 , 2020 ;
2 . Is not an ineligible business as listed in 13 C . F . R . 120.110 ( b )–( j ) and ( m ) ( s ). Ineligible businesses include , without limitation :
a .
b . businesses primarily engaged in the business of lending , such as banks , finance companies and factors ;
passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with loan proceeds ;
c . life insurance companies ;
d . businesses located in a foreign company ( foreign owned businesses in the United States may qualify ); and
e . speculative businesses ( such as oil wildcatting ). 3 . Has either ( a ) up to 15,000 employees or ( b ) 2019 annual revenues of up to $ 5 billion ; and
4 . Is created or organized in the U . S . or under U . S . laws , and which has significant operations in the U . S . and a majority of its employees based in the U . S . According to the Federal Reserve Main Street FAQ , to determine the number of a borrower ’ s employees or a borrower ’ s 2019 revenues for purposes of the eligibility requirements , its employees and revenues must be aggregated with the employees and revenues of its affiliated entities as provided in the CARES Act Paycheck Protection Program (“ PPP ”) aggregation rules set forth in 13 C . F . R . § 121 .
B . Eligible Lenders : Any U . S . federally insured depository institution , any U . S . branch or agency of a foreign bank , any U . S . bank holding company , any U . S . savings and loan holding company , any U . S . intermediate holding company of a foreign banking organization , or any U . S . subsidiary of these entities .
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