HM Treasury And The Bank Of England: Update On The Covid Corporate Financing Facility (CCFF) – Market Notice 22 September 2020
HM Treasury and the Bank are today confirming that the CCFF will close for new purchases of Commercial Paper (CP) with effect from 23 March 2021.
Although the magnitude of the economic impact from Covid-19 remains uncertain, activity has been supported by the fiscal and monetary policy actions introduced. The CCFF has helped eligible businesses bridge Covid-19 related temporary disruption to their cash flows.
Closure date of Facility
As indicated in the initial Market Notice of 18 March 2020 the CCFF was intended to operate for an initial period of 12 months. In line with this, and in light of current market conditions and recent usage patterns, the Bank and HM Treasury hereby give 6 months’ notice of the withdrawal of the facility.
The CCFF will close for new purchases of CP from eligible issuers with effect from 23 March 2021. This means that the Facility will make no purchases of CP after 22 March 2021.
The CCFF will also close to new applications from counterparties and issuers looking to become eligible on 31 December 2020.
Deadline for letters of commitment
As announced on 19 May 2020, issuers are required to provide a letter of commitment if:
- a CCFF purchase is entered into which involves CP maturing on or after 19 May 2021; and/or
- an increase in an issuer’s CCFF limit, over and above that initially approved by the Bank and HM Treasury, is requested and approved.
Given that, as noted above, the CCFF will close to new applications from issuers at the end of 2020, the deadline for submitting a letter of commitment to the Bank for HM Treasury’s review is also 31 December 2020.
Other than as amended by this Market Notice and the Market Notice published on 3 August 2020, the Terms and Conditions and Operating Procedures for participation in the CCFF will apply to transactions under this Facility.