Under the CCFF scheme, the Bank of England will buy short term debt in the form of commercial paper, from larger companies. This will support companies that have been affected by a short-term funding squeeze, and allow them to finance its short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
Larger companies require an investment grade rating or equivalent, and the Bank of England has confirmed that it will accept;
All non-financial companies that meet the criteria set out in the Bank of England's website are eligible
view at https://www.bankof england.co.uk/news/2020/march/the-covid-corporate-financing-facility >
Launched 23 March 2020
WHAT IS COMMERCIAL PAPER?
For many the first question may be what is commercial paper?
It is commercial paper is an unsecured, short-term debt instrument issued by a company.
Commercial paper the Facility will purchase
The Facility will purchase sterling-denominated commercial paper, with the following characteristics:
Detailed guidance on the Facility can be found on the Bank of England website which can be viewed at https://www.bankof england.co.uk/news/2020/march/the-covid-corporate-financing-facility >
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Lucinda Matkin - Licensed Insolvency Practitioner & Chartered Accountant