June 4, 2020 / 2:21 PM / 2 months ago

UK firms cut borrowing again through BoE COVID facility

FILE PHOTO: People wearing masks walk past the Bank of England, as the spread of the coronavirus disease (COVID-19) continues, in London, Britain, March 23, 2020. REUTERS/Toby Melville

LONDON (Reuters) - Bank of England lending to businesses affected by the coronavirus outbreak fell for a second week running, as the central bank revealed the list of companies using its facility for the first time since it launched in March.

The BoE said its holdings of commercial paper - a form of short-term debt issued by large companies - dropped to 16.186 billion pounds ($20.32 billion) as of June 3 from 18.979 billion pounds the week before.

Holdings of commercial paper can fall if it matures and the company that issues it chooses not to refinance with the BoE.

The new data showed the BoE owned 1 billion pounds of commercial paper issued by German chemical giant BASF (BASFn.DE) as of June 3, the most out of any company.

Other major holdings included German chemicals and pharmaceutical firm Bayer AG (BAYGn.DE), French luxury fashion house Chanel, Japanese carmaker Nissan (7201.T), airline EasyJet (EZJ.L) and catering group Compass (CPG.L).

Firms using the programme need to have substantial operations within Britain, and after a recent rule change, businesses issuing commercial paper which matures in more than a year’s time face restrictions on dividends and executive pay.

Business must also have held an investment-grade credit rating before the crisis, or had equivalent financial strength.

The BoE’s holdings of corporate bonds edged up to 14.537 billion pounds from 14.326 billion pounds.

Reporting by Andy Bruce, editing by David Milliken and Estelle Shirbon

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below