5 Questions About Annuity Issuers’ New Friend
May 13, 2020 by Allison Bell
The Federal Reserve Bank of New York is starting to try to keep the U.S. corporate bond market moving, by buying high-grade corporate bonds that are already on the market when no one else will buy the bonds.
The bank said Monday that it has put $37.5 billion into “special purpose vehicle,” or investment fund, that will fuel a new Secondary Market Corporate Credit Facility SMCCF and a new Primary Market Corporate Credit Facility (PMCCF).
The PMCCF will help organizations with high credit ratings borrow money, by issuing bonds, when finding buyers for new bond issues is difficult.
The SMCCF will be buying high-quality corporate bonds, and shares of U.S.-listed exchange traded funds (ETFs) that invest mainly in corporate bonds, that are already on the market, when the holders of those bonds have a hard time finding buyers.