On April 9, 2020, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued revised term sheets for two facilities directed at providing liquidity to the corporate debt markets: the Primary Market Corporate Credit Facility (the “PMCCF”) and the Secondary Market Corporate Credit Facility (the “SMCCF” and together, the “Facilities”).
Under the Facilities, the Federal Reserve Bank of New York (“FRBNY”) will lend on a recourse basis to a special purpose vehicle (“SPV”) which will purchase eligible newly-issued whole or pieces of bonds, or eligible secondary market bonds or exchange-traded funds (“ETFs”). The combined size of the Facilities will be up to $750 billion, and the Department of the Treasury (“Treasury”) will make a $75 billion equity investment into the SPV.
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