Sector developments and company hires

Bridging loan deal inked
UK challenger lender Glenhawk has closed a private revolving securitisation of bridging loans, with senior funding provided by JPMorgan. Glenhawk offers short-term property development and homeowner loans, and has recently been authorised by the FCA. The new capital will support Glenhawk’s growth into the UK homeowner market. The facility represents the first time that JPMorgan has invested in a private securitisation backed by UK bridging loans.

MMLF launched
The US Fed has established a Money Market Mutual Fund Liquidity Facility (MMLF), whereby loans will be made available to eligible financial institutions secured by high-quality assets purchased by the financial institution from money market mutual funds. The MMLF aims to assist money market funds in meeting demands for redemptions by households and other investors, enhancing overall market functioning and credit provision to the broader economy. Although the MMLF programme will purchase a broader range of assets, its structure is very similar to the ABCP Money Market Mutual Fund Liquidity Facility that operated from late 2008 to early 2010. The US Treasury will provide US$10bn of credit protection to the Fed in connection with the MMLF from its Exchange Stabilisation Fund. Federal bank regulatory agencies have announced an interim final rule that modifies capital rules so that financial institutions receive credit for the low risk of their MMLF activities.

PEPP rolled out
The ECB has launched a new temporary asset purchase programme of private and public sector securities dubbed the Pandemic Emergency Purchase Programme (PEPP), which will have an overall envelope of €750bn. Purchases will be conducted until the end of 2020 and will include all the asset categories eligible under the existing asset purchase programme (APP). Additionally, the range of eligible assets under the corporate sector purchase programme (CSPP) has been expanded to non-financial commercial paper, making all commercial paper of sufficient credit quality eligible for purchase under CSPP. Finally, collateral standards have been eased by adjusting the main risk parameters of the collateral framework to ensure that counterparties can continue to make full use of the Eurosystem’s refinancing operations.

UK CP facility prepped
HM Treasury and the Bank of England are set to launch on 23 March a Covid Commercial Financing Facility (CCFF), which will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy. The facility will offer financing on terms comparable to those prevailing in markets in the period before the Covid-19 economic shock and will be open to firms that can demonstrate they were in sound financial health prior to the shock. The scheme will operate for at least 12 months and for as long as steps are needed to relieve cashflow pressures on firms that make a material contribution to the UK economy.