The CCFF is one of the two major support measures announced by HM Treasury and the Bank of England. The other is the Coronavirus Business Interruption Loan Scheme.
Key information
CCFF is a committed Commercial Paper purchase facility provided by the Bank of England.
It is available to companies (both UK and foreign) making a material contribution to the UK economy, and which were at least investment grade as at 1 March 2020.
Companies operating in the financial sector are not eligible.
The CP programme can be set up on simplified documents published by the Bank of England and unlisted.
The discount at which the CP will be purchased will be a spread over OIS, with the spread driven by the issuer short-term ratings.
You will need to appoint a bank to sell the CP to the Bank of England on your behalf.
What is it?
The CCFF is one of the two major support measures announced by HM Treasury and the Bank of England.
The other is the Coronavirus Business Interruption Loan Scheme (see our separate bulletin).
Who can access the CCFF?
The CCFF is not available to all companies. There are a number of criteria to be satisfied:
(a) Material contribution to the UK economy
- This is tested by looking at the UK nexus for your business, for instance:
- A UK-owned and UK-incorporated company
- A foreign-owned and UK-incorporated company with a genuine business in the UK
- A company with significant employment in the UK
- A company with its headquarters in the UK
- A company that generates significant revenues in the UK, serves a large number of customers in the UK or has a number of operating sites in the UK.
(b) Sound financial health prior to Covid-19
To satisfy this you need to have a short- or long-term credit rating of investment grade as at 1 March 2020. This means A3/P3/F3/R3 or above, or a long-term rating of BBB-/Baa3/BBB-/BBB low or above by at least one of the major credit ratings agencies: S&P, Moody’s, Fitch or DBRS Morningstar.
If you do not have a credit rating there are arrangements for shadow credit assessment by the bank through which you access the CCFF.
A credit rating downgrade occurring after 1 March 2020 will not automatically exclude you from participation, but this is subject to HM Treasury approval.
(c) Excluded entities
The following categories of entities are excluded:
- Banks, building societies, insurance companies and other financial sector entities regulated by the Bank of England or the Financial Conduct Authority;
- Public bodies, public authorities and other entities governed by public law;
- Leveraged investment vehicles
- Companies within groups which predominantly active in businesses subject to financial sector regulation.
How do I access the CCFF?
The CCFF operates by the Bank of England acting as a committed purchase of Commercial Paper issued by eligible corporates. The names of corporates accessing the CCFF will not be made public, and you will need to sign a confidentiality agreement with the Bank of England.
If you do not already have a Commercial Paper programme, you will need to set one up. The Bank of England has published standard CP documentation, based on the ICMA standard form documents. The Bank of England will consider other forms of documentation as well.
Do remember to check any limitations on the incurrence of financial indebtedness in your existing facilities.
Do I need to appoint a bank to arrange my access to the CCFF?
Yes. You will need a bank to deal with the Bank of England on your behalf.
Read a list of eligible banks, and CCFF-specific contact details published by UK Finance.
Key features of CCFF Commercial Paper (primary market)
- Unlisted securities
- Maximum maturity of 364 days
- Issued at a discount – not interest-bearing
- Not listed or admitted to trading on any exchange.
- Short-form disclosure of the issuer's business
- Sterling denominated only
- Unsecured
- Minimum size for a purchase is £1m, and thereafter integral multiples of £100k
- Discount will be priced as a spread over Sterling OIS.
- The spreads are driven by short-term ratings, currently as follows:
| Short term Rating |
Spread over OIS |
| A1/P1/F1/R1 |
20 bps |
| A2/P2/F2/R2 |
40 bps |
| A3/P3/F3/R3 |
60 bps |
Other features of CCFF
It is also possible to access the CCFF through secondary market sales to the Bank of England. For this there is an additional fee of 5 bps and the purchase price will be the lower of the amortised cost from the actual issue price and the price derived if the CP had been a primary market issuance.
The Bank of England has committed to keep the CCFF open for at least 12 months.
CP purchases occur on each weekday betweem 10 and 11 am.
The Bank will set individual issuer limits, but will be capped at £1bn for A1-rated issuers; £600m for A2-rated issuers and £300m for A3-rated issuers.
You may need to provide parent guarantees.
