The Department of the Treasury will require publicly traded defense contractors and other national security firms applying for loans under the Coronavirus Aid, Relief and Economic Security Act to provide “appropriate financial instruments” such as equity stakes and warrants, Reuters reported Friday.
The borrower’s proposed financial instruments should “provide for a reasonable participation in equity appreciation or a reasonable interest rate premium appropriate for the benefit of taxpayers,” according to the application form posted on the department’s website.
Companies operating under a Top Secret facility security clearance and other firms critical to maintaining national security should submit their loan applications by May 1.
The Treasury will disburse $17B worth of loans to national security contractors under the CARES Act.
Treasury Secretary Steve Mnuchin said at a White House briefing the department will soon issue guidance on how to dole out relief funds for defense suppliers and other national security firms.