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

and transaction documentation;

(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 third report under section 4026(b)(1) of the CARES Act and reflects two 

transactions: one transaction on October 16, 2020, and one transaction on October 20, 

2020.

Treasury entered into these two loan transactions under section 4003(b)(1), (2), or (3) of 

the CARES Act for a total of $21.8 million, all of which has been disbursed.

Legacy Airways, LLC

Treasury agreed to make a loan totaling $1.8 million to Legacy Airways, LLC (Legacy), 

a cargo air carrier with approximately 19 U.S. employees in March 2020.

The loan is unsecured. It has an annual interest rate equal to LIBOR plus 5.5% and 

matures on October 20, 2025. Treasury funded the full loan amount at close. The 

loan proceeds will be used to provide liquidity to continue Legacy’s operations. The 

transaction agreement includes covenants by Legacy to comply with certain 

restrictions on employee compensation, stock repurchases, dividends, and reductions 

in employment levels, as required by the CARES Act. The loan constitutes senior 

indebtedness of Legacy, and Treasury will also receive 3% payment-in-kind annual 

interest on the loan in accordance with section 4003(d) of the CARES Act. 

Ovation Travel Group, Inc.

Treasury agreed to make a loan totaling $20 million to Ovation Travel Group, Inc. 

(Ovation), a ticket agent with approximately 250 U.S. employees in March 2020.

The loan is unsecured. It has an annual interest rate equal to LIBOR plus 5.5% and 

matures on October 15, 2025. Treasury funded the full loan amount at close. The 

loan proceeds will be used to provide liquidity to continue Ovation’s operations. The 

transaction agreement includes covenants by Ovation to comply with certain 

restrictions on employee compensation, stock repurchases, dividends, and reductions 

in employment levels, as required by the CARES Act. The loan constitutes senior 
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indebtedness of Ovation, and Treasury will also receive 3% payment-in-kind annual 

interest on the loan in accordance with section 4003(d) of the CARES Act. 

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 October 15, 2020, and October 20, 2020. 

Borrower

Borrower 

Type1 City2 State2

Date of Loan 

Agreement

Maturity 

Date

Total 

Anticipated 

Loan 

Amount Disbursements3

Legacy 

Airways, LLC

Cargo

Air Carrier Conroe TX 10/20/20 10/20/25 $1,817,306 $1,817,306

Ovation Travel 

Group, Inc. 

Ticket

Agent New York NY 10/15/20 10/15/25 $20,000,000 $20,000,000