June 11, 2020 / 7:59 PM / 24 days ago

UPDATE 1-U.S. Treasury's Mnuchin considering changes to aid for national security firms

(Adds quotes, details)

By David Lawder and David Shepardson

WASHINGTON, June 11 (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Thursday he was considering possible changes to the definitions of companies that could access $17 billion in coronavirus loans for companies important to national security.

“We’re first processing the existing requests,” Mnuchin told reporters, adding that he wanted to ensure that it is used for national security purposes. “If for whatever reason we don’t have enough demand, we may go back to Congress and reauthorize that for other areas.”

Mnuchin said a “large number of applications” for loans from the national security program were being reviewed but did not name any companies involved.

He said the Treasury had anticipated that Boeing would need to access capital from the program, but Boeing instead raised $25 billion in private debt markets.

Mnuchin also said some airlines have chosen not to take loans from a $25 billion fund after they accepted money from a separate $25 billion program that provided funding to airlines to keep employees on their payrolls.

“My expectation is that some of those airlines have expressed interest that they will want to use the loans. Others have said that they’re not sure,” Mnuchin said. “We’ve told them that they can access those loans between now and the end of September. So there are detailed negotiations going on, and we’ve also opened up to the full list of the airlines and the smaller regional carriers and charters and set out a bunch of criteria so that’s being worked on as well.”

The Treasury also confirmed this week that it had made its first major payroll funding to a cargo carrier, awarding Atlas Air Worldwide Holdings $407 million for payroll costs for its Atlas Air and Southern Air units.

The company must repay $199.8 million in a 10-year unsecured loan and is providing Treasury warrants to purchase 625,452 shares as funds are disbursed, Atlas said in a securities filing. (Reporting by David Lawder and David Shepardson; Editing by Chizu Nomiyama and Dan Grebler)

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