Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government whether they require accredited banks to take a super-senior position when granting Coronavirus Large Business Interruption Loan Scheme loans.

Except in respect of a residential development facility, a Coronavirus Large Business Interruption Loan Scheme (CLBILS) facility must at all times during its life, rank on at least a pari passu basis with the most senior obligations (including secured and/or super-senior obligations, if any) of the Borrower. This includes from all collateral taken by any lender from the borrower unless the borrower is a financing vehicle, whereby this will include any collateral from any member of its Group.

There are certain carveouts from this requirement including:

• collateral with an aggregate value not greater than 10% of the value (determined by the lender in accordance with its lending policies) of all relevant collateral; and
• collateral relating to asset and invoice finance facilities entered into in the ordinary course of business where the proceeds of such collateral would not be available to facilities other than such asset or invoice finance facility and where the lending policies and procedures would not require it to take security over such collateral.