In what we understand to be the first state law to do so, California’s Assembly Bill 913 (AB913), which was enrolled on September 4, 2020, amends Section 850 of the Public Utilities Code to allow electrical corporations to apply for a required financing order from the California Public Utility Commission (CPUC) to use securitization to
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Almost 12 years after the commencement of the Lehman Brothers bankruptcy case, we now know the answer to one of that case’s most interesting questions—namely, whether so-called “flip clauses” are protected settlement payments or void as ipso facto bankruptcy provisions.
On August 11, 2020, the US Court of Appeals for the Second Circuit (Court) issued a decision in the closely followed case of Lehman Brothers Special Financing Inc. v. Bank of America N.A., 18-1079, which raised this question in the context of synthetic collateralized debt obligations (SCDOs).
On May 12, 2020, the Federal Reserve Bank of New York announced the issuance of updated Terms and Conditions and a Frequently Asked Questions document (the “FAQs”) regarding the 2020 Term Asset-Backed Securities Loan Facility (“TALF 2020”). In this Legal Update, we discuss several aspects of the updated TALF 2020 documents with particular relevance to…
In statements made yesterday on “Squawk Box” on CNBC, Secretary Mnuchin said:
“I’m going to be putting out an announcement later this morning that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness.”
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In FAQ #31 posted on April 23, 2020, the US Small Business Administration offered the following clarification (italics added):
31. Question: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all…
On April 9, 2020, the U.S. Federal Reserve announced revised preliminary terms for the Term Asset-Backed Securities Loan Facility (“TALF 2020”). Certain CLO securities that are rated AAA by at least two rating agencies and are not rated below AAA by any other rating agency will be eligible collateral for loans under this program. In…
The SBA’s Paycheck Protection Program, a $349 billion loan guaranty program established by the CARES Act to provide deferrable, forgivable loans up to $10 million to small business owners addressed in more detail in prior Mayer Brown posts regarding the statutory provisions and the SBA’s Interim Final Rule, launched April 3, 2020. In the initial days after the program launch, hundreds of thousands of applications were submitted, but borrowers and lenders alike continued to have questions about key aspects of the program.
On April 6, 2020, the SBA clarified certain issues in new …
Continue Reading SBA Issues New Official FAQs for the Paycheck Protection Program (PPP) Addressing Borrower Eligibility, Affiliation, Underwriting, and Updates to Previously Submitted Applications
On March 31, 2020, the U.S. Department of the Treasury issued guidance on the Payroll Protection Program (PPP) under the CARES Act. The PPP provides small business with funds to pay payroll costs, including employee benefits. The funds can also be used to pay interest on mortgages, rent and utilities. The specific guidance issued included…
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. Among other things, the CARES Act creates the “Paycheck Protection Program” (PPP), which provides up to $349 billion to expand the Small Business Administration’s (SBA’s) existing 7(a) loan program to support new loan guarantees and subsidies. The terms of the PPP are described in more detail here.
The CARES Act allows the SBA and the Secretary of the Treasury to authorize additional lenders to make paycheck protection loans if they determine such additional lenders have the necessary qualifications to process, close, disburse and service loans made with the guaranty of the SBA. Details regarding the application process are expected to be provided in the next week. Treasury Secretary Steven Mnuchin publicly stated in an interview with Fox News yesterday that he “expects to have a program up on Friday.”
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law.
Among other things, the CARES Act creates the “Paycheck Protection Program,” which provides up to $349 billion to expand the Small Business Administration’s (SBA’s) existing 7(a) loan program to support new loan guarantees and subsidies. Highlights of the program include:…
Continue Reading Small Business Loans under the CARES Act