Bank of England tightens COVID corporate lending rules By Reuters

Bank of England tightens COVID corporate lending rules By Reuters

© Reuters. FILE PHOTO: The Bank of England in London, Britain

LONDON (Reuters) – The Bank of England said on Friday that it was tightening lending rules on a 20 billion pound ($26 billion) programme for large companies which had investment-grade credit ratings before the COVID pandemic.

The Covid Corporate Financing Facility (CCFF), launched in March, bought sterling commercial paper – a form of short-term debt – from companies which had top-notch credit quality before the crisis but faced trouble raising money during a period of market turbulence six months ago.

Lending under the programme peaked at 20.5 billion pounds in May, and has now fallen to 15.8 billion pounds.

The CCFF will close in March 2021, and the BoE said that now financial markets were calmer, it wanted to ensure any companies still borrowing from the fund were using it appropriately.

“Any eligible issuer wanting to issue new CP into the CCFF … will be subject to a review to consider whether that issuance remains in line with the purpose of the facility,” it said.

Businesses whose credit rating is no longer investment grade will also have to seek specific approval from Britain’s finance ministry, will be limited to selling a maximum of 300 million pounds of commercial paper to the BoE.

Existing commercial paper that has already been sold to the BoE is not affected.

($1 = 0.7686 pounds)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

About us

InvestLab is a financial services technology company focused on the global trading market. Founded in 2010 in Hong Kong, the company develops trading, market data, and social research products that enable individual investors and small to mid-size brokers to access global markets. We provide brokers and financial institutions cross border capabilities for retail investors into 43 markets globally.