The objective of private sector asset purchases under the Asset Purchase Facility is to improve the liquidity in, and increase the flow of, corporate credit by making purchases of high-quality private sector assets including commercial paper and corporate bonds.
The Commercial Paper Facility closed to new issuance on 15 November 2011. The Commercial Paper Facility enabled the purchase of investment grade sterling commercial paper. It aimed to channel funds directly to parts of the corporate sector whilst also underpinning secondary market activity and helping to enlarge the private issuance market, and so removing obstacles to corporate access to capital markets.
To achieve this, the Bank of England offered to purchase, at a minimum spread over risk-free rates, newly issued commercial paper in the primary market via dealers, and after issuance from other eligible counterparties in the secondary market.
The Bank's intention was that the Facility would operate for as long as the highly abnormal conditions in corporate credit markets that were impairing finance of real economic activity persisted. Given the improvements in market functioning since the Facility was introduced, the Bank provided 12 months' notice of its intention to withdraw the Commercial Paper Facility on 15 November 2010 and closed the Facility on 15 November 2011.