LONDON (Reuters) – The Bank of England said on Thursday it will double the size of its corporate bond purchase program to at least 20 billion pounds ($24.7 billion), part of a previously announced stimulus package to help the economy during the coronavirus crisis.
“(The BoE) expects to make these purchases at a significantly faster rate than in the 2016 scheme,” the BoE said in a statement.
The central bank last month increased its bond purchase program by a record 200 billion pounds to a total of 645 billion pounds, to be financed with newly-created money, mainly for British government bonds.
Until Thursday, it had not specified the size of planned corporate bond purchases.
The BoE will begin ramping up its corporate bond purchases through a series of reverse auctions starting on April 7, holding three a week, and it will be able to buy 20 million pounds of any single bond — double the previous amount.
As before, the BoE said it will aim to purchase a “balanced portfolio of bonds across eligible issuers and sectors”, so as not to favour specific companies or sectors of the economy.
The list of eligible bonds, last published in August and intended to include companies that “make a material contribution” to Britain’s economy, will be updated in mid-April.
Bonds issued by banks, building societies and insurers will not be eligible.
(1 = 0.8085 pounds)
(Reporting by Andy Bruce; Editing by William Schomberg and Toby Davis)