Details On Upcoming APF Corporate Bond Sales

The Bank of England has just released a market notice describing its upcoming sales of corporate bonds held in the Asset Purchase facility, scheduled to commence the week beginning Sept 19th.

• "In line with the MPC’s instructions, the Bank will aim to unwind in full the stock of CBPS holdings at the end of 2023, or in early 2024, subject to market conditions. As confirmed previously, this will happen via a combination of: bonds maturing; a programme of bond sales via auctions; and the potential for buybacks by bond issuers."
• "The primary method of sale will be a programme of regular multi-stock auctions."
• "The stock of CBPS holdings in terms of initial purchase proceeds as of 3 August 2022 was £19.1 billion, with a nominal value of £14.5 billion."
• "Only bonds that mature on or after 6 April 2024 will be eligible for sale via auctions in the first instance.... the nominal value of bonds eligible for sale via auctions is currently around £13 billion. The Bank will keep this maturity limit under review and reserves the right to adjust it as required."
• "The pace of auction sales will be gradual and responsive to prevailing market conditions, consistent with the MPC’s instructions to limit disruption to the functioning of the sterling corporate bond market."
• "In addition to its programme of auctions, the Bank will be open to offers from issuers who may wish to buy back their own bonds. The Bank will stand ready to conduct debt buybacks from the week beginning 17 October 2022, with the Bank considering offers from issuers on a case-by-case basis."