The US Federal Reserve (Fed) recently acquired corporate bonds worth 428 million dollars as part of its emergency program to boost the economy in the Corona crisis.<
The Fed announced on Sunday that it had added bonds from major oil and tobacco companies, retailer Walmart, fast food giant McDonald’s and telecom company AT&T to its portfolio. In addition, the central bank also invested corporate bonds from Coca-Cola, and Warren Buffett’s Berkshire Hathaway: in total, the currency guardians spent $5.7 million on debt in Berkshire Hathaway Energy, a subsidiary of the Buffett conglomerate.
According to the Fed, 48% of the bonds purchased were rated AAA, AA or A, while 48% were rated BBB and the final 4% were rated BB.
All bonds were bought on the secondary market. They came from 86 issuers. The Fed also added 16 listed index funds with a volume of 5.3 billion dollars.
In June, the Fed had announced that it would add an additional structure to its emergency program launched in mid-May to buy up corporate bonds. It is putting together a portfolio based on a broad-based market index of US corporate bonds. Special minimum standards for ratings, maximum maturity and other criteria applicable to the program will apply. The SMCCF (Secondary Market Corporate Credit Facility), which was launched in May, initially started by buying up shares of exchange funds on the secondary market. The aim of this credit vehicle is to provide stability and liquidity on the financial markets during the Corona crisis. Companies should be able to access fresh money as easily as possible