Two new funds that are supposed to help the Federal Reserve Bank of New York stabilize the U.S. corporate bond market gave the bond market a careful little tap in the seven-day period ending Wednesday.
The Corporate Credit Facility LLC — the parent of the Secondary Market Corporate Credit Facility (SMCCF) and the Primary Market Corporate Credit Facility (PMCCF) — says its two daughter funds added $1.496 billion in assets during that week.
The spending increased the two funds’ total funding to $1.801 billion, from $305 million a week earlier.
- Links to the H.4.1 releases are available here.
- An article about the Secondary Market Corporate Credit Facility coming to life is available here.
The Federal Reserve Board included those Corporate Credit Facility portfolio figures in a regular weekly H.4.1 release posted on the web Thursday. The H.4.1 release lists factors affecting the reserve balances of depository institutions and the condition of the Federal Reserve Banks.
The Fed included its first disclosure on the Corporate Credit Facility portfolio in the H.4.1 release that came out last week.
The New York Fed announced the birth of the Corporate Credit Facility in March, as turmoil related to the COVID-19 pandemic was hurting private employers’ ability to borrow money by issuing new bonds, and hurting the ability of life insurers, pension plans and other investors to sell existing bonds.
Officials call the market that companies use to issue new bonds the “primary bond market.”
The market investors use to buy and sell existing bonds is called the “secondary market.”
The New York Fed has said that it will put $75 billion in U.S. government cash into the Corporate Credit Facility, and that it has already put $37.5 billion into the facility.
The New York Fed has not said how it is splitting the $37.5 billion between the SMCCF and PMCCF. The new H.4.1 release does not show much of the $1.801 billion in Corporate Credit Facility portfolio came from the SMCCF and how much from the PMCCF.