Federal Reserve Main Street Liquidity to impact the Syndicated Loan Market

 The liquidity that rapidly flooded the treasury and corporate bond markets has been slower to reach the syndicated loan market. However, the US Federal Reserve’s Main Street lending program is now live.

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The delay in bringing the Main Street lending facility stems from the complexity and unstructured nature of the loan market. The bucket that will be utilized for syndicated loans will be the Main Street Expanded Lending Facility (“MSELF”). MSELF allows a borrower to upsize an existing eligible loan in an amount from $10 million to $300 million. Navigating eligibility and ensuring compliance with the existing documentation will present challenges. Furthermore, coordination among the lender group is required given the pari passu features of the MSELF loan. Tech platform Fintep streamlines communication between the agent, borrower, and lenders which could speed adoption of MSELF liquidity. More doubts? please contact us!