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On Jun 15 2020, the Federal Reserve is expanding its Secondary Market Corporate Credit Facility into corporate credit to now buy individual corporate bonds, on top of the exchange-traded funds it already is purchasing. I know the Fed is supposed to be apolitical.

The program has the ability to buy up to $750 billion worth of corporate credit. Its March 23 initial announcement is largely considered a watershed moment for the financial markets, reeling from the coronavirus threat spread.

The Fed says it is going to start buying individual corporate bonds

Under the latest guidelines, the Fed said it will buy, on the secondary market, individual bonds that have remaining maturities of five years or less. Those purchases will go along with the ETFs the Fed already has been buying, which are balanced toward investment-grade indexes but also include some junk bond funds that track debt which had been investment grade before the crisis but had been downgraded after.

I'll list just some corporations that succeeded in selling bonds. Total's over US$1 trillion at May 28 2020.

Exxon Mobil Corp. and Verizon Communications Inc., braved the financial turmoil created by the coronavirus pandemic and sold a combined US$12 billion of bonds in a single day.

Unlike previous years when companies deployed debt for acquisitions, almost all of the proceeds have been used to boost their cash. Boeing Co. sold US\$25 billion in the largest deal this year, followed by Oracle Corp.’s US\$20 billion. T-Mobile US Inc.’s US\$19-billion bond sale has been the only notably large offering for M&A, which helped finance its takeover of Sprint Corp.

Companies even increasingly double-dipped to get additional funding, often within weeks of their first offering. Nearly 40 non-financial companies — especially consumer ones like Coca-Cola Co. and McDonald’s Corp. — raised more than US\$100 billion in debt through May 13, up from six that borrowed twice in the same period in 2019, Citigroup strategist Daniel Sorid said in a report.

While several companies like Discovery Inc. and General Electric Co. have borrowed to refinance outstanding debt, many like Boeing and General Motors Co. have taken on additional obligations in what’s also been a period of rising net debt issuance. That may contribute to an even higher number of borrowers getting cut to junk this year.

On April 13, 2020, Marriott International, Inc. entered into a commitment letter providing for a 364-day senior unsecured revolving credit facility in an aggregate principal amount of $1.5 billion (the “364-Day Credit Facility”).

On June 5, Royal Caribbean Cruises Ltd. sold $2 billion of bonds on Thursday, the cruise liner’s second outing in the credit market in less than a month as its seeks to boost liquidity while the coronavirus keeps ships at port.

On June 8, General Electric Co said on Monday it reopened portions of its prior debt offerings for $3 billion in total proceeds to boost its cash reserves amid the coronavirus crisis.

On June 10, Delta Air Lines Inc. returned to the bond market within weeks of its last visit, looking to support its liquidity and repay outstanding debt.

On June 15 2020, American Airlines Group Inc. is in talks to raise new financing to help it weather the collapse in travel demand during the pandemic, according to people with knowledge of the matter.

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"...Its March 23 initial announcement is largely considered a watershed moment for the financial markets, reeling from the coronavirus threat spread..."

As the quoted statement implies, people are spurred into buying corporate bonds in the current environment precisely because of the Fed's previous announcement that it would purchase such bonds. The market has been---more precisely, believes it has been--- front running the Fed, which achieves intended effect of the policy. As shown by the examples listed, corporates have been able to tap into the bond market for financing. The Fed now has to demonstrate it can/will implement its announced program to signal its credibility, and thereby maintain the effectiveness of its current and future policies.

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