A man walks by the Wall Street subway sign on March 23, 2020 in New York City.
Angela Weiss | AFP | Getty Images
A draft copy of the massive $2 trillion Senate rescue package expected to be passed on Wednesday would bar companies receiving federal loans from stock buybacks for one year after the loan is paid back.
The massive rescue package authorizes $25 billion in loans to passenger air carriers, $4 billion to cargo air carriers, and $17 billion for “businesses critical to maintaining national security.”
The legislation would also bar certain companies from paying dividends to shareholders for one year after the loan is paid back, and from reducing their employment levels by 10% until the end of September.
In addition to loans, the legislation also authorizes cash grants to those in the airline industry. It calls for $25 billion in grants for passenger airlines, $4 billion for cargo carriers and $3 billion for contractors.
The grant conditions call for a pause on dividends and buybacks through September 2021 and a pledge to “refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020.”
The text of the legislation will have to be finalized and voted on by the Senate, approved by the Democratic-controlled House of Representatives and signed by President Donald Trump before becoming law.
The Senate is expected to take up the legislation later Wednesday. The House is unlikely to vote on the matter until Thursday.
— CNBC’s Kayla Tausche contributed to this report.
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