Private-equity owned firms may be largely excluded from the Federal Reserve’s expanded Main Street Lending Program even as the central bank widens the scope of the facility to include more highly leveraged borrowers.

The U.S. central bank Thursday broadened the program to include businesses with up to 15,000 employees or up to $5 billion in annual revenue. Policy makers also expanded the criteria of some loans to capture more highly indebted companies, and clarified that firms can use adjusted earnings metrics to meet leverage thresholds.

Yet buried in the Q&A and fine print of the revamped facility are details that say companies will be considered affiliates, and therefore viewed as a single entity for purposes of the program, if a third party controls or has the power to control the firms. The restrictions, similar to those found in the Paycheck Protection Program, would bundle together the headcount and revenue of private-equity backed businesses, making the vast majority of sponsor companies ineligible.

The exact wording of the affiliate test leaves some room for interpretation, according to market watchers. Whether the rule applies or not has real consequences for the $1.2 trillion leveraged loan industry. About 50% of the market would be eligible for the Fed lifeline without the affiliate restriction, but only about 15% could qualify if it were to apply, according to UBS Group AG analysts.

“As many leveraged-loan borrowers are majority-owned portfolio companies, the aggregation requirement has the potential to substantially limit the number of leveraged-loan borrowers that can benefit from the Main Street Lending Program in its current form,” said Art Rublin, counsel at Mayer Brown LLP.

This article was provided by Bloomberg News.