MNI POLICY: TEXT: BOC Changes Term Repo/BA Facilities

By Greg Quinn

     OTTAWA (MNI) - Following is text of the BOC's changes to repo and BA

purchase operations:

     With substantial improvements in short-term funding conditions recently, as

well as reduced participation since mid-April in the Bank's extended Term Repo

and Bankers' Acceptance Purchase Facility (BAPF) operations, the Bank is making

amendments to these programs.

     Effective June 16, 2020, the Bank will reduce the frequency of its Term

Repo operations from twice to once per week. Correspondingly, the number of

maturity points per week will be reduced from four to two, with the Bank

continuing to offer repo operations out to two years. In addition, it will

remove all LVTS members' bankers' acceptances or bearer deposit notes (including

own-name) from the list of eligible securities effective immediately. Own-name

covered bonds, Term ABS, and ABCP will remain eligible.

     Effective July 6, 2020, the Bank will reduce the frequency of its BAPF

operations from weekly to bi-weekly. Accordingly, the subsequent BAPF operation

will be held on July 20, 2020. All other BAPF parameters (size and pricing)

remain the same.

     The Bank recognizes the importance of maintaining these facilities as

backstops given ongoing uncertainty, and as such is committed to continuing them

at this frequency until the end of October 2020. At that time, the Bank will

reassess market conditions and evaluate the continued need for the BAPF and the

extended term repo facilities.

     The Bank will continue to monitor funding conditions, and if warranted,

will adjust its Term Repo and BAPF operations.

     The Bank remains committed to providing liquidity as required to support

the functioning of the Canadian financial system.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

[TOPICS: M$C$$$,M$$CR$,M$$FI$,MN$RP$]