Macy’s and Gap Inc. are furloughing most of their workers as their sales collapse — but they might not qualify for the massive backstop for companies that Congress just passed because their finances are so bad that their debt is rated as junk.
Already, more than half of companies that borrow through corporate bond markets aren’t eligible to get help from the Fed under its current rules because they aren’t classified as “investment-grade.” The central bank’s efforts aren’t designed to bail out companies that might go under, but instead to offer a reassuring backstop to private lending markets.
Lobbyists are working to shape the rules governing the $454 billion loan program for big and medium-sized businesses outlined in the law and backed by the Fed, which Treasury Secretary Steven Mnuchin must publish within a week. Retailers, which have been ordered to close in some states because they’re not considered essential businesses, are among those worried about not making the cut.
Because the Fed isn’t set up to take on the risk of companies defaulting, though, the worse the credit of the businesses allowed to apply for loans, the more money Treasury will have to kick in.
vtg2 Any day now, the Fed will announce another lending program aimed at smaller business. Some anticipated details about it, plus the story of the Fed's last venture into smaller-business lending, here:
The mall is dead.
kimshurtleff Now ain't that the shit.
Guess they just won’t pay their rent and we’ll see what happens.
Then, those corporations which do have credit ratings that qualify them for loans should have been denied the $500 billion and told to get their own loans.
MACY N GAP are safe?
Who exactly does this bill help then? I can’t imagine restaurants are safe borrowers either
debt that is safe belongs to oil companies, people will realize that soon enough
Does that mean Trump, Inc won’t be getting any money?