Treasury's Ninth Report Under Section 4026(b)(1) of the CARES Act
Summary
A U.S. Department of the Treasury report under Section 4026(b)(1) of the CARES Act; it is Treasury's ninth such report and reflects disbursements on December 1, December 2 and December 7, 2020 to three entities whose loans closed before the reporting period. The total disbursed to the three entities was $34,399,023. YRC Worldwide, Inc., listed as a national security borrower with a $700,000,000 loan agreement dated 7/7/2020, received a portion of the loan, $25,000,000, on December 2, 2020. Elite Airways, LLC received the full $2,630,274 on December 1, 2020, and Caribbean Sun Airlines, Inc. received the full $6,768,749 under a loan as amended 12/7/2020.
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“Treasury's Ninth Report Under Section 4026(b)(1) of the CARES Act.”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/u-s-department-of-the-treasury-4026-b-1-b-loan-report-12-08-2020-cff79e72bf/
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Report Under Section 4026(b)(1) of the CARES Act on
Loans to Air Carriers, Eligible Businesses, and National Security Businesses
Program Description
Section 4003 of the Coronavirus Aid, Relief and Economic Security Act (CARES Act)
authorizes the Treasury Department to make loans, loan guarantees, and other
investments to provide liquidity to eligible businesses related to losses incurred as a result
of coronavirus.
The CARES Act provides:
(1) up to $25 billion for loans and loan guarantees for passenger air carriers; eligible
businesses that are certified under 14 CFR part 145 and approved to perform
inspection, repair, replace, or overhaul services; and ticket agents (as defined in
49 U.S.C. § 40102);
(2) up to $4 billion for loans and loan guarantees for cargo air carriers; and
(3) up to $17 billion for loans and loan guarantees for businesses critical to
maintaining national security.
A loan or loan guarantee under section 4003 may be made in such form and on such
terms and conditions and contain such covenants, representations, warranties, and
requirements as the Treasury Secretary determines appropriate. However, the CARES
Act specifies a number of requirements applicable to these loans. Among other
requirements under the statute, borrowers must agree to maintain employment levels as
of March 24, 2020, to the extent practicable, and in any case not reduce their
employment levels by more than 10 percent from the levels on such date, until
September 30, 2020. Borrowers must also agree to certain restrictions on employee
compensation; agree not to repurchase stock, except to the extent required under a
contractual obligation in effect as of March 27, 2020; and agree not to pay dividends or
make other capital distributions with respect to the borrower’s common stock until 12
months after the loan has been repaid.
In addition, the CARES Act requires that Treasury receive a warrant or equity instrument
in the borrower if the borrower is a public company (unless Treasury determines that the
issuance of warrants or equity is infeasible, in which case the company must provide a
senior debt instrument), or a warrant, equity instrument, or senior debt instrument if the
borrower is a private company, to compensate taxpayers.
Reporting Requirements
The CARES Act requires Treasury to make a number of disclosures regarding its loans
and loan guarantees under section 4003 of the CARES Act:
(1) under section 4026(a) of the CARES Act, not later than 72 hours after any
transaction under section 4003(b)(1), (2), or (3) of the CARES Act, Treasury must
publish on its website a description of the transaction, certain transaction terms,
and transaction documentation;
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(2) under section 4026(b)(1)(A) of the CARES Act, not later than seven days after any
loan or loan guarantee under section 4003(b)(1), (2), or (3), Treasury must submit
to Congress a report summarizing the actions taken under those provisions and
certain related financial information;
(3) under section 4026(b)(1)(B) of the CARES Act, not later than seven days after
delivering the report to Congress described above, Treasury must publish the
report on its website; and
(4) under section 4026(b)(1)(C) of the CARES Act, every 30 days while a loan or loan
guarantee under section 4003(b)(1), (2), or (3) is outstanding, Treasury must
publish on its website a report summarizing its reports to Congress described
above.
Current Report
This is Treasury’s ninth report under section 4026(b)(1) of the CARES Act and reflects
disbursements on December 1, December 2, and December 7, 2020, to three entities
whose loans closed before this reporting period. The total amount disbursed to these
three entities during this reporting period was $34,399,023.
The loan agreements are available on Treasury’s website at
https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-american-
industry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses.
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Detailed Financial Statement
Total
Borrower Date of Loan Maturity Anticipated
Borrower Type1 City2 State2 Agreement Date Loan Amount Disbursements3
Caribbean Sun 11/5/2020
Passenger Air
Airlines, Inc. Virginia Garden FL (as amended 11/5/2025 $6,768,749 $6,768,749
Carrier
12/7/2020)
Elite Airways, 11/9/2020
Passenger Air
LLC Portland ME (as amended 11/7/2025 $2,630,274 $2,630,274
Carrier
12/1/2020)
YRC National
Overland Park KS 7/7/2020 9/30/2024 $700,000,000 $25,000,000
Worldwide, Inc. Security
1. Only certain categories of entities are eligible to receive loans under sections 4003(b)(1), (2), and (3) of the CARES Act. Under those
provisions, a borrower must be a passenger air carrier; a business that is certified under 14 CFR part 145 and approved to perform
inspection, repair, replace, or overhaul services; a ticket agent (as defined in 49 U.S.C. 40102); a cargo air carrier; or a business
critical to maintaining national security.
2. The location provided is the address included by borrowers in their applications and may not include all locations in which a borrower
operates.
3. Includes disbursements of a portion of the loan to YRC Worldwide, Inc. on December 2, 2020, and of the full amount of the loans to
Elite Airways, LLC on December 1, 2020 and to Caribbean Sun Airlines, Inc. on December 7, 2020.
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- TREAS-Section4026b1-Loan-Report-12-08-2020.pdf
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- Original
- home.treasury.gov