Bank of Canada/Central Bank of Canada/La Banque du Canada

Yale University

Bank of Canada to Introduce a CorporateBond Purchase ProgramNotice - Wednesday, April 15, 2020, 11:15 (ET)In order to support the efficient and continuous functioning of financial markets, theBank of Canada is announcing its intention to introduce a Corporate Bond PurchaseProgram (CBPP).This program will support the liquidity and proper functioning of the corporate debtmarket. A liquid and efficient market for Canadian-dollar corporate bonds allowscompanies, currently challenged by the impact of the COVID-19 pandemic, tocontinue to obtain necessary longer-dated financing to support their operations,ultimately aiding the Canadian economy. It also strengthens the pass-through ofmonetary policy actions to borrowers.To support the flow of credit for corporate issuers in Canada, the CBPP will purchaseeligible corporate bonds in the secondary market. The program size will be capped at$10 billion and will be restricted to senior secured and unsecured bonds originated byCanadian incorporated companies with a remaining maturity of up to 5 years and aminimum credit rating of BBB or equivalent. Debt issued by deposit-taking institutionswill be excluded given their access to other support facilities by the Bank of Canada.The program will remain active for a period of 12 months. The program’s parametersmay be expanded if conditions warrant.The Bank will conduct a targeted competitive process to select an asset manager torun this program. As previously announced, the Bank has retained BlackRockFinancial Markets Advisory to provide advisory services and CIBC Mellon to serve ascustodian.The CBPP is expected to be operational in early May. The specific launch date andfurther operational details of the program are expected to be announced by the end ofApril.The Bank of Canada continues to closely monitor global and domestic marketdevelopments and remains committed to providing all the liquidity the financial systemneeds so that it can continue to serve Canadians.Mark de Guzman DirectorFinancial Markets Department Bank of Canada 613-782-7245Media Relations Bank of Canada 613-782-8782Content Type(s): Press, Market noticesSource(s): Corporate Bond Purchase Program

Bank of Canada to Introduce a Corporate Bond Purchase Program

https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=12418&context=ypfs-documents

Bank of Canada to Introduce a Corporate Bond Purchase Program

Abstract

Similar works

Full text

Available Versions

Yale University