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Paul Forrester is a respected corporate finance and securities lawyer whose practice is especially focused on structured credit, including collateralized loan obligations, energy (including oil and gas, utilities, shipping, refinery and pipeline) financings and project development, and financing (especially concerning renewable energy, industrial, petrochemical, power and transportation projects and infrastructure).

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On May 18, 2020, the US Small Business Administration (SBA) released its twelfth interim final rule (IFR #12) on treatment of entities with foreign affiliates and purporting to “clarify” its own prior “guidance” noting that:

“Some market participants have indicated that there may be uncertainty regarding whether PPP applicants must include employees of foreign affiliates in their employee counts, because SBA has previously issued guidance stating that an entity is eligible for a PPP loan if it has 500 or fewer employees whose principal place of residence is in the United States. See 85 FR 20811, 20812 (April 15, 2020).”

Continue Reading Now We Know it Was “Mud”: The SBA “Walks Back” Its Prior Rules and FAQs Regarding Treatment of Foreign Affiliates

The US Small Business Administration has extended the safe harbor period for PPP loan return until May 14, 2020, stated that it will provide further guidance regarding the PPP necessity certification, and added confusion regarding the employee-size standard.

In yesterday’s FAQ #43, the US Small Business Administration (SBA) stated:

  1. Question: FAQ #31 reminded borrowers to review carefully the required certification[1] on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date?

Continue Reading Another Day with the Paycheck Protection Program: US SBA “Tweaks” the Rules (Yet Again)

On May 5, 2020, the US federal banking regulators adopted an interim final rule to modify the liquidity coverage ratio (“LCR”) requirement to support banking organizations’ participation in the Federal Reserve Board’s Money Market Mutual Fund Liquidity Facility (“MMLF”) and the Paycheck Protection Program Liquidity Facility (“PPPLF”).[1] The modification is effective immediately, but the regulators have requested comment on whether the modification should be expanded to other types of COVID-19-related stimulus facilities.

Continue Reading US Banking Regulators Modify Liquidity Coverage Ratio for COVID-19 Stimulus Effects

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,” and regarding the Los Angeles Lakers, the

Today, the US Small Business Administration (SBA) provided further guidance for PPP loan applicants in FAQ #37, which states:

  1. Question: Do businesses owned by private companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

Answer: See response to FAQ #31[1].

Beyond potentially excluding private companies (in addition to public companies under the SBA’s prior FAQ #31) with “adequate sources of liquidity,” the SBA offers no meaningful guidance regarding such “adequacy” or “sources” or even regarding what might constitute such “liquidity.”

Continue Reading Still Clear as Mud (Unfortunately): SBA’s Latest Official FAQ Fails to Provide Meaningful Guidance for Potential PPP Borrowers

On April 23, 2020, the New York Public Service Commission (NYPSC) issued an order authorizing the New York State Energy Research and Development Authority (NYSERDA) to conduct a 2020 solicitation to procure 1000MW of offshore wind (OSW) renewable energy certificates (ORECs) and with the flexibility to allow evaluation of bids for up to a total

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 2, 2020, the US Federal Energy Regulatory Commission (FERC) adopted a policy to expeditiously review and act on requests for relief in response to the national emergency caused by COVID-19, and that it will give its highest priority to processing filings made for the purpose of assuring the business continuity of regulated entities’ energy infrastructure and issued several orders[1] to provide the following specific regulatory relief:

Continue Reading US FERC Acts to Provide COVID-19 Regulatory Relief and to Prioritize Reliability Filings and Proceedings

On April 7, 2020, the US federal banking regulators issued a revised interagency statement (the “Revised Statement”) concerning agency treatment of loan modifications made in response to COVID-19.[1] The Revised Statement updates a prior statement that the regulators issued on March 22, 2020 to (i) address the enactment of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act on March 27, 2020[2] and (ii) provide greater clarity on whether a modified loan should be classified as a troubled debt restructuring (“TDR”) and the regulators’ enforcement posture with respect to loan modifications. See our Legal Update on the prior statement. A redline of the Revised Statement against the March 22 statement is included at Annex A.

Continue Reading Revised Guidance on Accounting for and Making Loan Modifications

The practical applications for utility tariff bonds (UTBs) continues to expand.[1] One additional use for UTBs may well be the recovery of COVID-19 pandemic costs (COVID-19 Costs) incurred by utilities. UTBs are an efficient way to finance costs over which a utility has little practical control and where the recovery of such costs would likely otherwise cause rate “shock” for customers.

Continue Reading Recovery of COVID-19 Costs by Utility Tariff Bonds?