Sector developments and company hires

Dealer credit facility launched
The US Fed has established a Primary Dealer Credit Facility (PDCF) available from 20 March, which will offer overnight and term funding with maturities up to 90 days. The facility will be in place for at least six months and may be extended as conditions warrant. Credit extended to primary dealers under the facility may be collateralised by a broad range of securities, including triple-A rated CLO and CMBS paper, as well as investment grade tranches of other ABS products. The interest rate charged will be the primary credit rate, or discount rate, at the New York Fed.

SME support plan proposed
The EIB Group has proposed a plan to mobilise up to €40bn of financing to support bridging loans, credit holidays and other measures designed to alleviate liquidity and working capital constraints for European SMEs and mid-caps amid the coronavirus outbreak. The measures will be undertaken through financial intermediaries in the member states and in partnership with national promotional banks. The proposed financing package consists of: dedicated guarantee schemes to banks based on existing programmes for immediate deployment, mobilising up to €20bn of financing; dedicated liquidity lines to banks to ensure additional working capital support for SMEs and mid-caps of €10bn; and dedicated ABS purchasing programmes to allow banks to transfer risk on portfolios of SME loans, mobilising another €10bn of support. Member states will determine where the funds for the guarantee would come from, but they could be drawn from the European Financial Stability Mechanism or could be pooled by member states themselves into a temporary new fund. In addition, the EIB Group will use existing financial instruments shared with the European Commission - primarily the InnovFin ‘Infectious Disease Finance Facility’ - to finance projects that work towards halting the spread of, finding a cure for and developing a vaccine against coronavirus.