Asset Purchase Facility Quarterly Report - 2020 Q1

In the interests of openness and transparency, we publish a quarterly report on the transactions carried out as part of the Asset Purchase Facility. The reports are published shortly after the end of each quarter.
Published on 27 April 2020

Overview

This report contains information on the Bank of England’s Asset Purchase Facility (APF) for Q1 from 1 January 2020 to 31 March 2020. It describes the operations carried out during the period. More information on what the APF is and what it does is available in our Market Operations Guide.

A short timeline describing the history of the APF is provided as background at the end of the report. Previous editions of the APF Quarterly Report can be found at the bottom of this page.

APF operations in the past quarter

This section contains details of gilt and corporate bond transactions, and gilts lent to the Debt Management Office (DMO), during the quarter. At its special meeting on 19 March, the Monetary Policy Committee (MPC) voted unanimously to increase the Bank of England’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to a total of £645 billion.[1] We published further details about the planned purchases for 2020 Q2 and beyond in a Market Notice on 19 March 2020.

During 2020 Q1 the APF made £26.5 billion of gilt purchases. A reinvestment programme totalling £17.5 billion completed on 23 March 2020, associated with the maturity on 7 March 2020 of a gilt owned by the APF.[2] Purchases commenced on 24 March 2020 to increase holdings of gilts as voted for by the MPC.

The APF made no corporate bond purchases in 2020 Q1. We published further details about the purchases planned for 2020 Q2 and beyond in a Market Notice on 2 April 2020.

Table A summarises the stock of APF gilt and corporate bond purchases in 2020 Q1.

Table A Summary of stocks in Asset Purchase Facility Schemes (a) (£ millions)

Week ending

Gilts (b)

Corporate bond purchase scheme (c)

2019 Q4 (d)

434,990

1 January 2020

434,990

9,820

8 January 2020

434,990

15 January 2020

434,990

22 January 2020

434,990

29 January 2020

434,990

5 February 2020

434,990

9,820

12 February 2020

434,990

19 February 2020

434,990

26 February 2020

434,990

4 March 2020

434,990

9,820

11 March 2020

420,432

18 March 2020

423,344

25 March 2020

437,999

 

31 March 2020

443,999

Source: Bank of England.

(a) The outstanding amount in each facility is reported on a settlement date basis.
(b) The overall stock of APF gilt purchases, less redemptions, valued at initial purchase price.
(c) The overall stock of APF Corporate Bond Purchase Scheme purchases, less redemptions, valued at initial purchase price.
(d) 2019 Q4 measured as the amount outstanding as at 25 December 2019.

Chart 1 shows the cumulative net value of APF transactions between the establishment of the Fund and end-March 2020. As at 31 March 2020, cumulative assets purchased net of sales, redemptions and repayments totalled £453.8 billion.

Chart 1 is separated into two panels with different scales. Gilt purchases and the Term Funding Scheme (TFS – which from 2016 to 2019 was on the APF balance sheet before transfer to the Bank’s balance sheet) are on the left panel. The corporate bond schemes and legacy commercial paper schemes that have been operated via the APF balance sheet are on the right panel. The recently launched Covid Corporate Financing Facility (CCFF) is not part of the APF balance sheet.

Chart 1 Cumulative asset purchases by type: amounts outstanding (a)

Source: Bank of England.

(a) Data based on settled transactions.
(b) On 21 January 2019 the TFS drawings were moved to the Bank’s balance sheet and therefore are not reported after this date.

Gilts purchased via the APF continue to be made available for on-lending to the market through the gilt lending arrangement with the DMO. The average daily aggregate value of gilts lent by the APF to the DMO during the three months to 31 March 2020 was £2.4 billion.

APF history and background

Below is a summary of some of the key milestones in the history of the APF since its establishment in 2009.

19 January 2009 Chancellor’s Statement announcing the intention to set up an asset purchase programme.

29 January 2009 Establishment of the APF Fund (see exchange of letters between the Bank and HM Treasury).

9 November 2012 HM Treasury announces the transfer of gilt coupon payments to the Exchequer (see exchange of letters between the Bank and HM Treasury).

4 August 2016 MPC agrees to expand the APF by launching a Term Funding Scheme (TFS) and a Corporate Bond Purchase Scheme (CBPS) (see exchange of letters between the Bank and HM Treasury).

21 June 2018 Bank and HM Treasury agree new capital and income framework codified by a new Memorandum of Understanding.

21 January 2019 TFS drawings (and collateral) transferred from the APF to the Bank of England’s balance sheet.

19 March 2020 MPC agrees to expand the APF with a £200 billion increase to the stock of UK gilts and sterling non-financial investment-grade corporate bonds to reach £645 billion.

Links to additional information related to the APF

• Exchange of letters between the Bank and HM Treasury, 17 February and 3 March 2009.

Asset Purchase Facility Annual Report 2018/19.

  1. Access past minutes and decisions by the MPC on the news, publications and events page.

  2. You can find further details in our results and usage data.

Next publication date: 27 July 2020

ISSN 2041-1936

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