Eligible securities
The Fund will be operated by the Bank under an agreement with HM Treasury. The Bank and HMT will keep under review whether to propose any extensions or variations of the Facility in the future.
The Fund will purchase the sterling-denominated CP of eligible issuers, with the following characteristics:
- A maturity of one week to 12 months if issued to the Bank at issue via a dealer. Drawings can be rolled while the CCFF is open, subject to eligibility.
- Where available, a minimum short-term credit rating of A-3 / P-3 / F-3 / R3 from at least one of Standard & Poor’s, Moody’s, Fitch and DBRS morningstar as at 1 March 2020. This reference point is deliberately set prior to the possible impact of Covid-19 on firms’ short-term credit ratings. Issuers with split ratings where one or more rating is below the minimum are not eligible. The Bank and HMT will consider the eligibly of issuers at the lowest rating that were on negative watch or negative outlook as at 1 March.
- Where a short-term credit rating is not available the Bank will consider whether a long-term credit rating can be used to assess eligibility and pricing, or whether the Bank can assess that the issuer is of equivalent financial strength.
- Where no rating is available, the Bank encourages potential issuers to speak to their bank in the first instance. If the bank’s advice is that the firm was viewed internally as equivalent to investment grade as at 1 March 2020, then we would suggest contacting us to discuss your potential eligibility. The Bank will then make an assessment of whether you can be deemed as equivalent to having a public investment grade rating. This assessment will draw on a range of information, including the range of banks’ internal ratings across all of a firm’s commercial bank counterparties. A firm will need to be rated consistently by its banks as investment grade in order to be deemed equivalent to having a public investment grade rating.
- Issued directly into Euroclear and/or Clearstream.
If an issuer is downgraded after 1 March 2020 below the minimum credit ratings set out above, the issuer will remain eligible for primary and secondary market purchase in the Facility, subject to HM Treasury approval.
The Bank may not approve as eligible any CP which has certain non-standard features (eg extendibility, subordination etc).
Securities issued by a finance subsidiary should be guaranteed by their parent company in a form acceptable to the Bank.
Eligible counterparties that wish to offer CP to the Bank in the secondary market must confirm the eligibility of specific securities with the Bank prior to offering them for sale, using the template that will be published on the information for applicants webpage. Eligible counterparties should contact the Bank at CCFF-applications@bankofengland.co.uk.
Confirmation of eligibility will be provided bilaterally to the counterparty submitting the request. When the Bank confirms their eligibility before 16:00, securities will be eligible for sale to the Fund from the following business day.
The names of issuers and securities purchased or eligible will not be disclosed publicly.
The Bank, the Fund and HM Treasury reserves the right at its sole discretion to deem any security ineligible for any reason, and to deem ineligible securities it has previously purchased and vice versa.