The Covid Corporate Financing Facility

(CCFF)

CCFF Operating Procedures

Contents
1 Introduction.................................................................................................................................. 1

2 Eligibility ...................................................................................................................................... 2

3 Applications and Closure of Facility ............................................................................................ 4

4 CCFF Operations ........................................................................................................................ 5

5 Settlement ................................................................................................................................. 10

Appendix A – Communication with the Bank ........................................................................................ 11

11 March 2021
Covid Corporate Financing Facility CCFF Operating Procedures

1 Introduction

1.1 These Covid Corporate Financing Facility (CCFF) Operating Procedures govern participation
in the CCFF and explain the operational procedures involved. Covid Corporate Financing
Facility Limited (the Fund) is a wholly-owned subsidiary of the Bank of England (the Bank)
and operated by the Bank on behalf of HM Treasury (HMT). The Bank acts as agent for the
Fund.

1.2 All capitalised terms have the meaning defined in the CCFF Terms and Conditions.

1.3 These CCFF Operating Procedures should be read together with the other parts of the legal
CCFF Documentation – comprising the Terms and Conditions for counterparties in the CCFF,
the Admission Letter, the Application Form, any Market Notice and any other documentation
or procedures issued by the Bank in connection with the CCFF, each as supplemented and
amended from time to time.

1.4 In the event of a conflict between these CCFF Operating Procedures and the CCFF Terms
and Conditions, the CCFF Terms and Conditions shall prevail. In the event of any conflict
between any Market Notice and these CCFF Operating Procedures or the CCFF Terms and
Conditions, the Market Notice shall prevail.

1.5 The Bank may amend these CCFF Operating Procedures generally or in particular
circumstances from time to time, with any such amendment taking effect at a time specified
by the Bank. A link to copies of the Documentation as amended will be posted on the Bank’s
website1 and significant amendments will be circulated to Counterparties in the CCFF.

1.6 The Bank will endeavour to give reasonable notice of any amendment, but reserves the right
to introduce any amendment with immediate effect. The Bank may also vary the operational
schedule or vary or omit any of the procedures described on any particular day.

1.7 All transactions or planned transactions by individual Counterparties as part of the CCFF
should be treated as confidential (in accordance with the CCFF Terms and Conditions).

1.8 All references to times are to London time, unless stated otherwise.

1.9 References in these CCFF Operating Procedures to Euroclear should be taken to refer to the
Euroclear settlement system operated by Euroclear Bank SA/NV.

1 https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/documentation

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Covid Corporate Financing Facility CCFF Operating Procedures

2 Eligibility

2.1 The Fund will purchase commercial paper (CP) that meets the eligible securities criteria
outlined below, and that has been issued in the primary market from dealers acting as
principal on behalf of eligible issuers. It will also purchase CP in the secondary market from
eligible institutions.

Eligible Dealers
2.2 Eligibility will be determined on a case by case basis.

2.3 Counterparties must be appropriately authorised for the purposes of the Financial Services
and Markets Act 2000 (FSMA).

2.4 Dealers can apply to participate in the CCFF by following the instructions in Section 3.

Eligible Issuers
2.5 The Fund will purchase CP issued by companies or limited liability partnerships (LLPs) (in
each case, including their finance subsidiaries) that make a material contribution to economic
activity in the United Kingdom. Eligibility decisions will be made by our risk management staff,
taking into account a number of different factors.

2.6 UK incorporated companies and LLPs, including those with foreign-incorporated parents and
with a genuine business in the UK, will normally be regarded as meeting this requirement.

2.7 In addition, companies and LLPs with significant employment in the UK or with their
headquarters in the UK will normally be regarded as meeting this requirement. We will also
consider whether the company or LLP 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.

2.8 CP issued by public bodies or authorities, entities governed by public law or public
undertakings will not be eligible. This may include entities which are partially owned by a
public body or authority. For these purposes, a ‘public undertaking’ refers to an undertaking
over which a State, or other regional or local authorities of a State, may directly or indirectly
exercise a dominant influence by virtue of their ownership of it, their financial participation
therein or the rules which govern it.

2.9 CP issued by banks, building societies, insurance companies and other financial sector
entities regulated by the Bank of England or the Financial Conduct Authority will not be
eligible.

2.10 CP will not be eligible if issued by:

(i) leveraged investment vehicles; or

(ii) companies within groups or LLPs within groups (including their affiliates), in each case
which are predominantly active in businesses subject to financial sector regulation.

2.11 Companies and LLPs that do not currently issue CP but are capable of doing so, and of
meeting the CCFF eligibility requirements, will in principle be eligible to utilise the CCFF.

2.12 Where available, issuers should have a minimum short-term credit rating of A-3 / P-3 / F-3
from at least one of Standard & Poor’s, Moody’s and Fitch as at 1 March 2020. This
reference point is deliberately set before the possible impact of Covid-19 on firms’ short-term

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Covid Corporate Financing Facility CCFF Operating Procedures

credit ratings. Issuers with split ratings where one or more ratings are below the minimum are
not eligible. The Bank and HMT will consider the eligibility of issuers at the lowest rating that
were on negative watch or negative outlook as at 1 March 2020.

2.13 Where a short-term credit rating is not available the Bank will consider whether a long-term
credit rating can be used to assess eligibility and pricing, or whether the Bank can assess that
the issuer is of equivalent financial strength.

2.14 On 19 May 2020, HMT announced that issuers participating in the CCFF may be required to
commit to restraint on their capital distributions and on senior pay. Issuers will be required to
provide a letter of commitment in relation to this if:

(i) an increase in an issuer’s CCFF limit, over and above that suggested by the issuer’s
investment rating, is requested and approved; and/or

(ii) a CCFF transaction is entered into which involves CP maturing on or after 19 May 2021.

HM Treasury reserves the right to publish this letter, should HM Treasury become aware that
the terms of the letter have not been complied with.

The deadline for submitting a letter of commitment to the Bank for HMT’s review is 31
December 2020.

2.15 On 9 October 2020, HMT announced an enhanced process to review the credit quality of
eligible issuers. To support orderly repayment of CP, issuers wanting to issue CP into the
CCFF after 9 October 2020 will, in addition to satisfying the eligibility criteria set out above, be
subject to an enhanced credit quality review and will be required to provide supplemental
evidence of their credit rating. These requirements are described in the Market Notice dated 9
October 2020.

Eligible Securities
2.16 The Fund will purchase the sterling-denominated CP of eligible issuers, with the following
characteristics:

(i) A maturity of one week to twelve months if issued to the Bank at issue via a dealer.
Drawings can be rolled while the CCFF is open, subject to eligibility.

(ii) Issued directly into Euroclear and/or Clearstream.

2.17 The Bank may not approve as eligible any CP which has certain non-standard features (e.g.
extendibility, subordination).

2.18 If requested by the Bank or if required to ensure that the securities rank in substance at least
pari passu with the senior unsecured indebtedness of the issuer’s group, the issuer must
ensure that a guarantee is provided. The guarantee should be in a form and substance
acceptable to the Bank and accompanied by legal opinion(s) in a form and substance
acceptable to the Bank and on which the Bank, the Fund and HMT can each rely.

2.19 Eligible CP must meet ICMA standards, and be governed by English law and subject to the
jurisdiction of the English courts.

2.20 Eligibility of securities must be confirmed with the Bank before Counterparties offer them to
the Bank (see 3.3 – 3.6).

2.21 Confirmation of security eligibility will be provided bilaterally to the issuer submitting the
request.

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Covid Corporate Financing Facility CCFF Operating Procedures

2.22 Each of the Bank, the Fund and HMT reserves the right, in its sole discretion, to deem any
security ineligible for any reason, and to deem ineligible securities it has previously purchased
and vice versa. Notwithstanding the foregoing, the Bank confirms that, whereas it reserves
the right not to roll over at maturity and not to acquire any CP that is (or is deemed to be)
ineligible, it does not have the right to and will not unilaterally:

(i) Cancel any CP (whether or not it is ineligible or deemed to be so).

(ii) Require or make any variations to the terms of any issued CP acquired by the Fund.

(iii) Require any ineligible CP previously acquired by the Fund to be bought back by the
issuer.

3 Applications and Closure of the CCFF

3.1 All application forms and other documentation are available on the Bank’s website 2 and
should be submitted to [email protected]. Guidance on providing
evidence of authority to sign is also available on the Bank’s website3.

3.2 Eligible Dealers who wish to participate in the CCFF should complete and submit the CCFF
Application Form. Once their application has been approved, the Bank will issue an
Admission Letter which should be signed and returned.

3.3 Eligible issuers in the primary market should sign and submit the Issuer Undertaking and
Confidentiality Agreement, and provide evidence of authority to sign in a form acceptable to
the Bank.

3.4 Eligible issuers in the primary market should complete and submit the Issuer Eligibility Form
(Primary Market).

3.5 Eligible issuers should provide any guarantee required to ensure that the securities rank in
substance at least pari passu with the senior unsecured indebtedness of the group. The
guarantee should be in a form and substance acceptable to the Bank and accompanied by
legal opinion(s) in a form and substance acceptable to the Bank and on which the Bank, the
Fund and HMT can each rely.

3.6 Eligible Dealers wishing to offer CP to the Bank in the secondary market may be requested to
complete the Issuer Eligibility Form (Secondary Market).

3.7 The Bank reserves the right to reject an application or to exclude Counterparties after
admission to the CCFF without explanation.

3.8 The CCFF will close to new applications from Counterparties and issuers on 31 December
2020. Fully eligible issuers already signed up to the CCFF at this time will continue to be able
to issue new CP until the closure of the CCFF subject to the credit review requirements
announced in the Market Notice dated 9 October 2020.

3.9 The Bank will close the CCFF to new purchases on 23 March 2021. The Bank will purchase
securities with a maturity date beyond 23 March 2021 on any day up to and including 22
March 2021.

2
https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/information-for-applicants
3
https://www.bankofengland.co.uk/-/media/boe/files/markets/sterling-monetary-framework/authorised-signatory-
evidence-form-guidance-ccff.pdf

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Covid Corporate Financing Facility CCFF Operating Procedures

4 CCFF Operations

4.1 Purchases of CP are undertaken by the Bank, acting on behalf of HMT, to provide funding to
businesses making a material contribution to the UK economy.
Table 1 Parameters applicable for the CCFF

Parameter Description
Timing Daily purchases between 10.00 and 11.00
Notification Issuers must notify the Bank by no later than 11 am 5
Business Days in advance of any intended sale date. The
Bank will endeavour to confirm within that timeframe whether
the transaction can proceed on the requested sale date.
Size There is no operational limit to the amount of CP the Bank
stands ready to purchase on a daily basis
Limits Purchases in the primary markets may be limited by issuer.
Where two or more issuers are part of the same group or are
affiliates of each other, an aggregate limit may be applied.
Duration of operational period 1 hour
Minimum offer £1 million nominal for each individual security
Minimum offer increment £0.1 million nominal
Settlement T+2 days

Size of operation and limits

4.3 Purchases of CP in the primary markets will be limited by issuer. Any such limits applying to
individual issuers will be made available to the issuer and the Eligible Dealer(s) acting as
principal on behalf of the issuer only. In addition, guidance on indicative limits is available on
the Bank’s website.

4.4 Where two or more issuers are part of the same group or are affiliates of each other, an
aggregate limit will be applied within which any limits applying to the individual issuers are
wholly or partly fungible at the Bank’s discretion.

4.5 From 9 October 2020, any firm whose long-term credit rating falls to, or below, BBB-
/Baa3/BBB (low) or equivalent after 1 March 2020 will have their aggregate drawing limit
capped at a maximum of £300 million. This will not affect outstanding drawings if already in
excess of £300 million.

Pricing
4.6 All purchases will take place on a bilateral basis. The Bank reserves the right to modify the
structure of its purchase operations. The Bank and the Fund each reserve the right to reject
any offers to sell CP to the Fund, for any reason.

4.7 The Bank will purchase securities at a spread above a reference rate, based on the current
sterling overnight index swap (OIS) curve. Spreads will be set such that pricing is close to the
market spreads prevailing before the economic shock from Covid-19.

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Covid Corporate Financing Facility CCFF Operating Procedures

4.8 CP purchased in the primary market will be discounted using a rate based on the maturity-
matched overnight index swap (OIS) rate, as determined by the Bank on the day of purchase.
The respective reference OIS rate will be determined at 09:45 on the day of the operation.
Money market yield conventions will be applied. The spread to the OIS rate at which the
Bank will purchase CP will vary according to the credit rating of the Eligible issuer and will be
published in advance on the Bank’s website 4 or as advised by the Bank’s Sterling dealing
desk.

4.9 CP purchased in the secondary market will be purchased at the lower of (a) amortised cost
from the issue price and (b) the price as given by the method used for primary market
purchases as set out above. The Bank will apply an additional fee for use of the secondary
facility, payable separately, as published on the Bank’s website5.

4.10 Where an issuer has a split rating, the spread will be that derived from the lowest rating.

4.11 The Bank will keep its pricing under review in light of market conditions and its experience in
operating the CCFF.

Submission of offers
4.12 Eligibility of specific securities must be confirmed with the Bank before Counterparties offer
them for sale (see 3.3 – 3.6).

4.13 Issuers should notify the Bank of their intent to sell CP to the Fund no later than 11am 5
Business Days in advance of the intended sale date. Issuers should contact the Bank at
[email protected]. The Bank will endeavor to confirm within that
timeframe whether the transaction can proceed on the requested sale date.

4.14 The notification should include the issuer’s recent credit rating or equivalent evidence of
investment grade credit quality, to a comparable standard to the evidence submitted to
establish initial eligibility for the CCFF. Where a ‘point in time’ rating is obtained from a Credit
Rating Agency, evidence of current investment grade status must date from no longer than
eight weeks before the proposed date of issuance.

4.15 Counterparties should submit offers to sell CP to the Fund using the email template provided
on the Bank’s website6, between 10.00am and 11.00am each business day. Offers should be
emailed to [email protected] (or as advised on the Bank’s wire
services page).

4.16 For primary market purchases, Counterparties must provide details of the issuing entity, the
CP programme the securities are issued from, maturity date and the nominal amount offered.
Maturity dates will follow the “modified following” convention. For secondary market sales,
Counterparties must provide the ISIN and ticker of the security; the original issue price and
date (or the money market yield on an amortised cost basis); the maturity date; and the
nominal offered.

4.17 The minimum size of an individual security that the Fund will purchase from an individual
participant is £1 million nominal. The offer amount should be expressed in increments of £0.1
million nominal.

4 https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/information-for-participants
5 https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/information-for-participants
6 https://www.bankofengland.co.uk/markets/covid-corporate-financing-facility

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Covid Corporate Financing Facility CCFF Operating Procedures

4.18 The Bank’s sterling dealing desk will confirm as soon as reasonably practical by return email,
or other appropriate means, whether an offer has been accepted and will confirm the cash
amount and, for primary market purchases, maturity date.

4.19 For a primary market purchase, after any offer has been accepted, the Counterparty should
confirm the ISIN of the new CP issued from the CP programme as soon as is possible once
available.

4.20 In its primary market purchases, the Fund will purchase the CP of a particular issuer from one
Eligible Dealer only each day. In that case, the Bank would accordingly require issuers
seeking to sell CP to the Fund in the primary market via a number of dealers to ensure that
only one such dealer seeks to sell its CP to the Fund on any particular day

4.21 The Bank reserves the right to cancel or postpone an operational period at any time.

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Covid Corporate Financing Facility CCFF Operating Procedures

Early Repayment
4.22 Early repayment of funds borrowed via the CCFF will be permitted on request, by means of a
standing offer to sell back CP held by the Fund to the original issuer.

4.23 All such sales will take place on a bilateral basis, with the original issuer and an appointed
Eligible Dealer only. The Bank reserves the right to modify the structure of its re-sale
operations. The Bank and the Fund each reserve the right to reject any request from an
issuer to repurchase its CP from the Fund, for any reason.

4.24 Re-sales will be offered at a price determined by the Bank, based on the higher of either (a)
the amortised cost from the price at which the Fund purchased the CP, or (b) the current price
as given by the method used for primary market purchases of equivalent maturity from the
same firm.

4.25 The Bank will usually charge an additional fee for early repayments, as published on the
Bank’s website.7 This fee will be deducted from the yield offered in the re-sale transaction, as
described above, before calculating the final price and cash proceeds. In light of the changes
to the CCFF outlined on 19 May, this fee will not be applied to re-sale transactions entered
into on or before 30 June 2020.

4.26 The minimum size of an individual security that the Fund will sell back to an individual
participant will be the lower of £1 million nominal, or the full amount held by the Fund. The
amount requested should be expressed in increments of £0.1 million nominal.

4.27 Counterparties should submit requests for early repayment using the template provided on
the Bank’s website8, and emailed to [email protected].

4.28 Requests for early repayment should be made with sufficient notice in advance of the
requested re-sale date and, in any event, must be received by the Bank by at least 11am on
the business day prior to the requested re-sale date. The Bank reserves the right, at any time
prior to the transaction, to nominate an alternative re-sale date, if it considers it necessary to
do so for operational or other reasons.

4.29 The Bank’s Sterling dealing desk will confirm as soon as reasonably practicable by return
email, or other appropriate means, whether a request to repurchase CP has been accepted
and the agreed re-sale date. Pricing details and the associated cash amount will be confirmed
as soon as possible on the re-sale date.

4.30 As for primary market purchases, the Fund will resell the CP of a particular issuer via one
Eligible Dealer only each day.

4.31 Settlement of re-sale transactions will take place on a T+2 basis, and subject to the same
process and conditions as for purchase transactions, as set out below.

4.32 With effect from 22 March 2021 the provision of a standing offer to sell back CP held by the
Fund in advance of its agreed maturity date will move to a weekly, rather than daily,
frequency. The Bank will run a window on the first working day of each week until the sum of
stock held by the CCFF returns to zero. The Bank reserves the right to trade outside of the
above times, for any reason.

7 https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/information-for-participants
8
https://www.bankofengland.co.uk/-/media/boe/files/markets/covid-corporate-financing-facility/ccff-transaction-
form.xlsx

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Covid Corporate Financing Facility CCFF Operating Procedures

Published information
4.33 On 19 May 2020, the Bank and HMT updated a number of the terms and conditions of the
CCFF. As part of these changes, certain additional information on users and usage of the
CCFF will be published from 4 June 2020 as described below.

Each Thursday at 15:00, the Bank will publish (in aggregate):

(i) the total amount of CP purchased that week (reported on a settlement date basis) up until
the previous day, in terms of the amount paid to the sellers;

(ii) the sum of CP purchased less redemptions and sales (reported on a settlement date
basis), since the CCFF began in March 2020;

(iii) the nominal sum of drawing capacity of all CCFF approved businesses on the date
shown;

(iv) the number of businesses approved for CCFF issuance since 23 March 2020 (excluding
businesses that have voluntarily terminated access after approval);

(v) the number of businesses approved for CCFF issuance that have outstanding CP held by
the CCFF;

(vi) the number of businesses approved for CCFF issuance that do not have outstanding CP
held by the CCFF; and

(vii) in addition to the businesses approved for CCFF issuance, the number of businesses that
have applied to the CCFF and have been approved as eligible in principle but have yet to be
fully approved for CCFF issuance, since it began in March 2020.

4.34 In addition, with effect from Thursday 4 June 2020, the Bank and HM Treasury have agreed
that the Bank will publish additional firm-level data each Thursday at 15:00. This will consist
of:

(i) the names of those businesses who have outstanding CP issued into the CCFF (reported
on a settlement date basis); and

(ii) the amount of CP each business has outstanding under the CCFF (reported on a
settlement date basis).

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Covid Corporate Financing Facility CCFF Operating Procedures

5 Settlement

5.1 As part of the application process for the CCFF, Counterparties must provide the Bank with:

(i) settlement area contact details, including telephone numbers and settlement group email
addresses;

(ii) Standard Settlement Instructions (SSIs) (for settlement accounts to be used); and

(iii) where the Counterparty operates via an agent or custodian, contact details for the agent
or custodian should also be provided in case of settlement issues.

5.2 These settlement and SSI details can only be changed with 24 hours’ notice, either by
authenticated signed instruction or by SWIFT instruction (sent to our SWIFT BIC BKENGB2L
fao MST, BU 13).

5.3 The Bank will send transaction confirmations by email to the nominated contact address on
the day of the transaction. Any differences must be highlighted by the Counterparty within 24
hours. Otherwise this transaction confirmation will be deemed to be the agreed version.

5.4 The Bank will accept verbal (via telephone), written or electronic transaction confirmations
sent by Counterparties.

5.5 All trades should be input and matched and ready for settlement at 17.00 on the day prior to
settlement.

5.6 The pricing used on all trades should be rounded to 3 decimal points.

5.7 Where trades are to settle in real time, it is the Counterparty’s responsibility to attach a
daylight indicator to enable such trades to settle.

5.8 Where CCFF maturities do not settle on the agreed maturity date because of any failure on
the part of CCFF eligible issuer, for example - but not limited to - failing to instruct in a timely
manner, eligible issuers may be charged a late payment charge of: valuation equivalent to the
extended maturity plus a flat fee of 0.2bps on the nominal size of the transaction.

5.9 Counterparties are liable in accordance with the CCFF Terms and Conditions to pay or
reimburse to the Bank all of their costs, charges fees, and other expenses. These include in
particular (and without limitation) any transfer taxes, registration charges and value added
taxes incurred in connection with the transfer of securities.

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Covid Corporate Financing Facility CCFF Operating Procedures

Appendix A – Communication with the Bank

A.1 Telephone numbers, including for front and back offices and the Bank’s contingency site, are
contained in the table below.

A.2 Counterparties should understand that email (whether encrypted or unencrypted) is not a
secure method of communication and that messages so delivered may be intercepted, lost,
destroyed, corrupted or delayed in transmission. The Bank encourages all Counterparties
who communicate with the Bank by email to use encrypted email only.

A.3 All key electronic communications with the Bank are securely archived. Furthermore, all
telephone conversations with the Bank’s sterling dealing desk and back office are recorded.
In the event of a dispute, reference will be made to the archive and recordings.

A.4 The table below summarises contact details for specific queries and actions.

Table A Telephone numbers and email addresses for contacting the Bank.

Action Contact
Queries on admission to the CCFF, all application Applications Team:
documentation including Issuer Eligibility Forms, [email protected]
eligibility of commercial paper issuers, specific
commercial paper programmes or individual
securities
Queries during operational periods Sterling dealing desk:
via direct line or 0203 461 5000
Offers made during operations via forms [email protected]
Queries regarding commercial paper settlement Market Settlements Team:
[email protected]
If you wish to give notice that you are withdrawing [email protected]
from the CCFF

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