Originally Posted by
LumberJack
You're not making sense.
First, the equity only applies to the loans, not the grants.
Second, read Ed's memo on Deltanet, Subject: Some Welcome Relief
I’m not trying to troll you. Just wanted to give you this language from the bill which applies directly to the grants. It’s at the discretion of Steve Mnuchin, Secretary of Treasury, to ask for equity stake for grants. In contrast, the loans (5yr max term) must have collateral agreements from the company receiving; so if they pay off the loans that the collateral agreement is terminated. The equity for grants COULD be more murky if Mnuchin chooses to exercise that equity requirement, because there isn’t any mechanism to retrieve that equity back from the government; in fact it would seem that buying back that equity from the government would go directly against the “no stock/equity buybacks” this bill specifically prohibits until September 30, 2021.
SEC. 4117. TAX PAYER PROTECTION.
The Secretary may receive warrants, options, pre- ferred stock, debt securities, notes, or other financial in- struments issued by recipients of financial assistance under this subtitle which, in the sole determination of the Secretary, provide appropriate compensation to the Fed Government for the provision of the financial assistance.
SEC. 4114. REQUIRED ASSURANCES.
(a) IN GENERAL.—To be eligible for financial assistance under this subtitle, an air carrier or contractor shall enter into an agreement with the Secretary, or otherwise certify in such form and manner as the Secretary shall prescribe, that the air carrier or contractor shall—
(1) refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020;
(2) through September 30, 2021, ensure that neither the air carrier or contractor nor any affiliate of the air carrier or contractor may, in any transaction, purchase an equity security of the air carrier or contractor or the parent company of the air carrier or contractor that is listed on a national securities exchange;
(3) through September 30, 2021, ensure that the air carrier or contractor shall not pay dividends, or make other capital distributions, with respect to the common stock (or equivalent interest) of the air carrier or contractor;