BOSTON (SHNS) – The Federal Reserve Board on Wednesday announced plans to start winding down a temporary emergency lending facility it established in connection with the CARES Act.
The Federal Reserve Bank of New York manages the operations of the Secondary Market Corporate Credit Facility (SMCCF) and plans to announce additional details soon and before sales begin, the central bank said.
The credit facility was established on March 23, 2020 “to support credit to employers by providing liquidity to the market for outstanding corporate bonds” and it ceased purchasing eligible assets on Dec. 31, 2020.
In a report to Congress last month, the Federal Reserve said the Federal Reserve Bank of New York loans extended under the program totaled $13.8 billion.
“The SMCCF proved vital in restoring market functioning last year, supporting the availability of credit for large employers, and bolstering employment through the COVID-19 pandemic,” the Fed said. “SMCCF portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange-traded funds and corporate bonds.”