July 2, 2020 – Developments this week include guidance from the Small Business Administration clarifying the maturity of Paycheck Protection Program (PPP) loans, a new term sheet from the Federal Reserve for the Primary Market Corporate Credit Facility, and an announcement by the Treasury Department that it had agreed to loan terms for five major U.S. airlines.  In addition, the House of Representatives and the Senate passed legislation that would extend the PPP loan application deadline to August 8; the President is expected to sign it into law shortly.

Regulatory Developments Relating to the Pandemic

SBA Clarifies PPP Loan Maturity

On June 25, the Small Business Administration (SBA) published guidance clarifying the maturity of PPP loans. PPP loans that received an SBA loan number on or after June 5, 2020 have a five-year maturity. PPP loans that received an SBA loan number before that date have a two-year maturity, unless the borrower and lender agree to extend the term of the loan to five years.

OSHA/CDC Guidance for Seafood Processing Industry

On June 25, the Occupational Safety and Health Administration (OSHA) and the Centers for Disease Control and Prevention (CDC) published guidance for reducing the risk of coronavirus exposure in the seafood processing industry applicable to both onshore facilities and aboard offshore vessels.

New Term Sheet for Primary Market Corporate Credit Facility

On June 29, the Federal Reserve released a new term sheet for the Primary Market Corporate Credit Facility, established by the CARES Act, adding pricing and other information. As detailed in an accompanying FAQ, pricing for the facility will be issuer-specific and informed by market conditions. Prices will also be subject to minimum and maximum spreads over comparable maturity Treasury securities.

USPTO Extends Certain Patent-Related Fee Deadlines

On June 29, the US Patent and Trademark Office (USPTO) extended from July 1, 2020, to September 30, 2020 the time for small and micro entities to pay certain patent-related fees including basic filing fees, issue fees, maintenance fees, and other fees that would otherwise have been due on or after March 27, 2020.  The USPTO noted that other extensions of time and other relief remain available on a case-by-case basis to those who may need it.  The USPTO also noted a new deadline for the previously-announced filing fee waiver for petitions for the revival of applications that became abandoned: the waiver is available only if such a petition is filed by July 31, 2020.

Treasury and Five Major Airlines Agree on Loan Terms

On July 2, the Treasury Department announced that American Airlines, Frontier Airlines, Hawaiian Airlines, Sky West Airlines, and Spirit Airlines have signed letters of intent setting out the terms on which the Treasury Department would extend loans under Division A, Title IV, Subtitle A of the CARES Act.  Loan terms are subject to the execution of definitive agreements, and relevant transaction documentation will be posted on www.Treasury.gov/CARES within 72 hours after a transaction is completed.

Legislative Proposals

S. 4116: A bill to extend the PPP filing deadline

On June 30, the Senate passed legislation that would extend the application filing deadline for Paycheck Protection Program (PPP) loans to August 8.  Senators Benjamin Cardin (D-MD), Chuck Schumer (D-NY), Jeanne Shaheen (D-NH), Chris Coons (D-DE), Jacky Rosen (D-NV), and Susan Collins (R-ME) introduced the bill on June 30, the original filing deadline. The House joined the Senate in passing the bill on July 1 and the President is expected to sign it.

S. 4101: Loan Interest Forgiveness for Taxpayers Under a Pandemic (LIFT UP) Act

On June 30, Senators Ted Cruz (R-TX), Marco Rubio (R-FL), Shelley Moore Capito (R-WV), and Thom Tillis (R-NC) introduced legislation that would expand debt forgiveness and extend the six-month forgiveness period for recipients of Small Business Administration (SBA) disaster loans. 

S. 4117: Paycheck Protection Small Business Forgiveness Act

On June 30, Senators Kevin Cramer (R-ND), Bob Menendez (D-NJ), Thom Tillis (R-NC), and Kyrsten Sinema (D-AZ) introduce bipartisan legislation that would simplify the process for Paycheck Protection Program (PPP) loan forgiveness. Under the act, borrowers with loans of $150,000 or less (which constitute 85% of all PPP borrowers and 26% of PPP loans by value) would be able to submit a one-page form to the lender to request forgiveness.

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