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Report Under Section 4026(b)(1) of the CARES Act on 

Loans to Air Carriers, Eligible Businesses, and National Security Businesses 

Program Description

Section 4003 of the Coronavirus Aid, Relief and Economic Security Act (CARES Act) 

authorizes the Treasury Department to make loans, loan guarantees, and other 

investments to provide liquidity to eligible businesses related to losses incurred as a result 

of coronavirus.

The CARES Act provides:

(1) up to $25 billion for loans and loan guarantees for passenger air carriers; eligible 

businesses that are certified under 14 CFR part 145 and approved to perform 

inspection, repair, replace, or overhaul services; and ticket agents (as defined in 

49 U.S.C. § 40102); 

(2) up to $4 billion for loans and loan guarantees for cargo air carriers; and

(3) up to $17 billion for loans and loan guarantees for businesses critical to 

maintaining national security.

A loan or loan guarantee under section 4003 may be made in such form and on such 

terms and conditions and contain such covenants, representations, warranties, and 

requirements as the Treasury Secretary determines appropriate. However, the CARES 

Act specifies a number of requirements applicable to these loans. Among other 

requirements under the statute, borrowers must agree to maintain employment levels as 

of March 24, 2020 to the extent practicable, and in any case not reduce their employment 

levels by more than 10 percent from the levels on such date, until September 30, 2020. 

Borrowers must also agree to certain restrictions on employee compensation; agree not 

to repurchase stock, except to the extent required under a contractual obligation in effect 

as of March 27, 2020; and agree not to pay dividends or make other capital distributions 

with respect to the borrower’s common stock until 12 months after the loan has been 

repaid.

In addition, the CARES Act requires that Treasury receive a warrant or equity instrument 

in the borrower if the borrower is a public company (unless Treasury determines that the 

issuance of warrants or equity is infeasible, in which case the company must provide a 

senior debt instrument), or a warrant, equity instrument, or senior debt instrument if the 

borrower is a private company, to compensate taxpayers.

Reporting Requirements

The CARES Act requires Treasury to make a number of disclosures regarding its loans 

and loan guarantees under section 4003 of the CARES Act:

(1) under section 4026(a) of the CARES Act, not later than 72 hours after any 

transaction under section 4003(b)(1), (2), or (3) of the CARES Act, Treasury must 

publish on its website a description of the transaction, certain transaction terms, 

and transaction documentation;
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(2) under section 4026(b)(1)(A) of the CARES Act, not later than seven days after any 

loan or loan guarantee under section 4003(b)(1), (2), or (3), Treasury must submit 

to Congress a report summarizing the actions taken under those provisions and 

certain related financial information;

(3) under section 4026(b)(1)(B) of the CARES Act, not later than seven days after

delivering the report to Congress described above, Treasury must publish the 

report on its website; and

(4) under section 4026(b)(1)(C) of the CARES Act, every 30 days while a loan or loan 

guarantee under section 4003(b)(1), (2), or (3) is outstanding, Treasury must 

publish on its website a report summarizing its reports to Congress described 

above. 

Current Report

This is Treasury’s first report under section 4026(b)(1) of the CARES Act and reflects one 

transaction on July 8, 2020.

Treasury entered into one loan transaction under section 4003(b)(1), (2), or (3), for a total 

of $700 million. Of this amount, $245 million has been disbursed.

YRC Worldwide Inc. 

Treasury agreed to make loans totaling $700 million to YRC Worldwide Inc. (YRC). YRC 

is a leading provider of Department of Defense supply transportation and other delivery 

services for the U.S. Government. An initial disbursement of the Tranche A loan in the 

amount of $245 million was made on July 9, 2020.

The loans will be made in two tranches, both of which will be secured. Tranche A 

provides $300 million to meet certain of YRC’s near-term contractual obligations and nonvehicle capital expenditures, with an interest rate equal to LIBOR plus 3.5%, consisting of 

1.5% cash and 2.0% payment in kind. Tranche B provides $400 million for capital 

investments made pursuant to capital plans subject to approval by Treasury, with an 

interest rate equal to LIBOR plus 3.5% in cash. Both tranches mature on September 30, 

2024. The agreements include covenants by YRC to comply with certain restrictions on 

employee compensation, stock repurchases, dividends, and reductions in employment 

levels, as required by the CARES Act. Treasury will receive shares equal to 29.6% of 

YRC’s common stock on a fully diluted basis, to be held in a voting trust, as appropriate 

taxpayer compensation. Pledged collateral comprises a third lien on all company assets 

and a first lien on all assets that will be newly purchased.

The loan agreements are available on Treasury’s website at 

https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-americanindustry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses.
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Detailed Financial Statement ($ Thousands)

1. Only certain categories of entities are eligible to receive loans under sections 4003(b)(1), (2), and (3) of the CARES Act. Under those 

provisions, a borrower must be a passenger air carrier; a business that is certified under 14 CFR part 145 and approved to perform 

inspection, repair, replace, or overhaul services; a ticket agent (as defined in 49 U.S.C. 40102); a cargo air carrier; or a business 

critical to maintaining national security.

2. The location provided is the address included by borrowers in their applications and may not include all locations in which a borrower 

operates.

3. Includes disbursements between July 8, 2020, and July 15, 2020.

Borrower

Borrower 

Type1 City2 State2

Date of Loan 

Agreement

Maturity 

Date

Total 

Anticipated 

Loan Amount Disbursements3

YRC Worldwide Inc. National 

Security

Overland 

Park KS 7/8/2020 9/30/2024 $700,000 $245,000