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Bank of England corporate bond buying starts Sept 27

The Bank of England announced its plans for corporate bond-buying after the London close on Monday. The central bank will start buying on September 27 and will continue buying for an “initial period” of 18 months

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Bank of England details corporate bond buying plans

The Bank of England announced its plans for corporate bond-buying after the London close on Monday.

The central bank will start buying on September 27 and will continue buying for an “initial period” of 18 months.

Monday’s announcement details eligibility criteria for the scheme and explains that the companies included must “make a material contribution to economic activity in the UK”.

it will start buying on September 27 and will continue buying for an “initial period” of 18 months.

Additionally the bonds must be rated investment grade by at least one agency, must have a total value of at least £100m and must have more than one year to maturity.

Debt sold by financial companies will not be eligible for the scheme and neither will “bonds with complex or non-standard structures” such as convertible bonds.

To carry out the purchases, the bank will provide a list of eligible securities each Friday for a reverse auction the following week.

But nowhere does it stipulate the debt has to be home-grown.

An initial list, published alongside the bank’s statement, includes companies such as mobile business Vodafone (LON:VOD), the state-backed Transport for London and German automaker Daimler as well as the Californian computer business Apple (NASDAQ:AAPL. In total 270 bonds are listed from around 100 companies.

Quick facts: Vodafone Group plc

Price: 146.24 GBX

LSE:VOD
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Market Cap: £39.15 billion
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