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Requirements for Refinancing Outstanding CPP or CDCI Securities

To be considered for refinancing of outstanding CPP or CDCI securities with SBLF funding, your institution must meet all of the eligibility requirements that otherwise apply to Small Business Lending Fund participants, plus the following additional requirements:

  • The institution must be in material compliance with all the terms, conditions, and covenants of any CPP or CDCI agreement and financial instrument;

  • The institution must not have missed more than one dividend payment under CPP or CDCI (where a missed payment is defined as a payment submitted more than 60 days after the due date); and

  • The institution must pay, in immediately available funds, the amount of any unpaid dividends for the payment period prior to the SBLF closing date, plus accrued and unpaid dividends as of the date of refinancing for the payment period that includes the closing date.

The maximum amount of available SBLF funding for CPP or CDCI refinancing is the same as it is for regular SBLF participants.  It is based on the size of your institution.  If your institution has up to $1 billion in assets, the maximum will be 5% of its risk-weighted assets.  If your institution has more than $1 billion and less than $10 billion in assets, the maximum will be 3%.

If your institution has CPP or CDCI stock with an aggregate liquidation preference greater than the maximum amount of permissible SBLF funding, your bank must redeem the additional CPP or CDCI stock in immediately available funds on or before the date it receives SBLF funding.

All outstanding CPP and CDCI securities must be refinanced or repaid in full at the time of the refinancing.  In addition, the SBLF funding must be at least 1% of your institution’s risk-weighted assets.

Any warrants that your institution has issued to Treasury under CPP will remain outstanding after CPP refinancing through the Small Business Lending Fund, unless you repurchase them. 

Institutions applying to refinance CPP or CDCI securities will not be considered for approval on a “matched funding” basis (although they are not prohibited from raising capital if they choose).

Institutions that are refinancing CPP investments must increase their small business lending to receive an economic benefit from refinancing.  If at the beginning of the tenth full calendar quarter after the date on which a bank receives SBLF funding, the bank’s Qualified Small Business Lending as reported in the ninth quarter has not increased relative to its baseline amount, then the bank will be required to pay, at the beginning of the fifth anniversary of the CPP investment, a repayment incentive fee equal to 2% per year on the total amount of outstanding SBLF funding.  This fee will extend through the date ending 4.5 years following the institution’s receipt of SBLF funding.​​​​​​​​​​​​​​​​​​​​

Last Updated: 8/19/2011 2:47 PM