External Meetings: Definitions Meeting with Wells Fargo

The meeting covered various issues related to the ECP definition.  Wells Fargo expressed a concern that middle market borrowers would not be permitted to hedge in certain cases and that Wells Fargo might, as a result, scale back its lending to those customers if Wells Fargo cannot enter appropriate hedges in connection with its loans.  The scenarios discussed in the meeting all related to who can be an ECP in connection with interest rate swaps hedging loans in various circumstance.  Wells Fargo advanced the following solutions:  (1) joint and several liability among entities that are ECPs and non-ECP entities should be an acceptable structure; (2) ECP borrowers and non-ECP guarantors should be permitted; and (3) non-ECPs providing collateral to support the interest rate swap obligations of ECP borrowers/counterparties to interest rate hedges should be acceptable.