Covid Corporate Finance Facility

Published by Darren Hurdle on 4 November 2020

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Last updated 4 November 2020

The Covid Corporate Finance Facility (“CCFF”, “the Facility”) is a joint initiative between HM Treasury and Bank of England.  It is designed to support liquidity among larger firms, helping them to bridge Coronavirus disruption to their cash flows through the purchase of unsecured, short-term corporate debt in the form of commercial paper of up to one-year maturity.

This could be the right solution for businesses which:

  • Can demonstrate sound financial health before the emergence of COVID-19.
  • Make a material contribution to economic activity in the UK.
  • Are looking to raise at least £1 million.
  • Need not have previously issued commercial paper.


  • Eligible companies include, non-financial companies (and their finance subsidiaries), that “make a material contribution to the UK economy”.
  • These would normally be:
    • UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK.
    • Companies with significant employment in the UK.
    • Firms with their headquarters in the UK.
  • Consideration will also be given to whether the company 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.
  • Companies in “sound financial health” are deemed to be those that had a short or long-term rating of investment grade (or equivalent) as at 1st March 2020.
  • Investment grade means a short-term rating of A3/P3/F3/R3 or above, or a long-term rating above BBB-/Baa3/BBB- by at least one of the major credit ratings agencies: S&PMoody’sFitch or DBRS Morningstar.
  • If you do not have a credit rating, get in touch with one of the major credit rating agencies to seek an assessment of credit quality in a form that can be shared with Bank of England and HM Treasury, noting that you are doing so because you wish to use the CCFF.
  • Commercial paper issued by banks, building societies, insurance companies and other financial sector entities regulated by the Bank of England or the FCA will not be eligible.
  • As of 9 October 2020, there is now an enhanced process to review credit quality in advance of CCFF issuance. Please see here for further details.

Key features and benefits

  • The Facility is operated by the Bank of England on behalf of HM Treasury.
  • CCFF will purchase sterling-denominated commercial paper, with maturity between one week and 12 months and issued directly into Euroclear and/or Clearstream.
  • The minimum size of an individual security that the Fund will purchase from an individual participant is £1million.
  • Drawings from 9 October 2020 will be capped at a maximum of £300m for any firm whose long-term credit rating falls to, or below, BBB-/Baa3/BBB (low) or equivalent after 1 March 2020 (This will not affect outstanding drawings if already in excess of £300 million).
  • Commercial paper issued by a finance subsidiary should be guaranteed by their parent company.
  • The Bank of England may not approve any commercial paper with non-standard features such as extendibility or subordination.
  • The Facility will offer financing on terms comparable to those prevailing in markets in the period before COVID-19.
  • Should a company’s rating be downgraded, or financial health deteriorates after 1st March 2020, provided it can demonstrate good financial health prior to that date it will remain eligible to participate in the facility.
  • Companies do not need to have issued commercial paper prior to using the CCFF.
  • Names of issuers and securities purchased or eligible will not be disclosed publicly.
  • The Facility will be operated for at least 12 months and for as long as steps are needed to relieve cash flow pressures.
  • 6 months’ notice of the withdrawal of the Facility will be given.

Next steps

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