Treasury Report Under Section 4026(b)(1)(C) of the CARES Act (September 6, 2020)

Summary

A U.S. Department of the Treasury report dated September 6, 2020, under Section 4026(b)(1)(C) of the CARES Act on loans to air carriers, eligible businesses and national security businesses. It reflects one outstanding transaction, which occurred on July 8, 2020, with YRC Worldwide Inc., listed as a national security borrower with a maturity date of 9/30/2024. The financial statement, in thousands of dollars, shows a $700,000 loan amount, $245,000 in total anticipated disbursements, $246,145 outstanding and $572 in cash interest receipts. The report sets out the CARES Act disclosure requirements, including a report every 30 days while a loan is outstanding.

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“Treasury Report Under Section 4026(b)(1)(C) of the CARES Act (September 6, 2020).” Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/u-s-department-of-the-treasury-4026-b-1-c-loan-report-09-06-2020-ab9253e1df/, SHA-256 65911b00f2a4172f86cbd140eba559f37c4f2e1de2110243fabbb01d2dbb0880.

Full text

                              Report Under Section 4026(b)(1)(C) of the CARES Act on
                     Loans to Air Carriers, Eligible Businesses, and National Security Businesses

                                                     September 6, 2020

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.




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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;
   (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.

Treasury has published the information and reports described above on its website at
https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-american-industry/loans-to-air-carriers-eligible-
businesses-and-national-security-businesses.

Current Report

This report summarizes information about transactions under sections 4003(b)(1), (2), and (3) of the CARES Act.

This report reflects one outstanding transaction, which occurred on July 8, 2020.

(See next page)




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Detailed Financial Statement ($ in Thousands)
                                                          Date of                            Total                                          Total
                 Borrower                                  Loan          Maturity         Anticipated                                    Outstanding              Cash Interest
 Borrower         Type1           City2         State2   Agreement        Date           Loan Amount           Disbursements3           Loan Amount4                Receipts
   YRC
                  National      Overland
 Worldwide                                       KS       7/8/2020      9/30/2024           $700,000               $245,000                $246,145                    $572
                  Security       Park
   Inc.


Note: Data are as of the date of this report.

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. “Disbursements” includes all loan disbursements.
4. “Total Outstanding Loan Amount” includes all loan disbursements and increases of loan principal amount arising from payment-in-kind (PIK) interest.




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File: TREAS-4026b1C-Loan-Report-09-06-2020.pdf
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Our copy: TREAS-4026b1C-Loan-Report-09-06-2020.pdf
Original: home.treasury.gov