The Federal Reserve on Sunday released more details of an emergency loan program that buys corporate debt, showing which US companies have benefited from its unprecedented measures to support the flow of credit into the economy.
Through its loan facilities, the Fed is buying individual corporate bonds on the market in amounts commensurate with an index of its own construction, which would eventually see the central bank break a large cross-section of US investment grade debt. investment grade.
The bonds of these companies were the 10 largest beneficiaries as of June 17.
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It is early, so the largest purchases by the Federal Reserve do not align perfectly with the main components of the bond market index.
The six main components of the new Fed debt index are Toyota, Volkswagen, Daimler, AT&T, Apple and Verizon Communications, but only AT&T T,
made the top 10 shopping list.
These differences are expected to be resolved over time as the central bank gets more debt. The Fed has purchased 119 bond issues in the two trading days since June 17, even when the index is made up of 794 issuers.
The discrepancy between the Fed’s purchases and the index that supports the purchase of central bank bonds is also reflected in how the proportion of credit ratings of the bonds purchased differs with the proportion of ratings reflected by the benchmark debt index of the Fed.
For example, about 54.8% of bonds included in the Fed’s broad market index have a triple B credit rating, the largest but lowest letter rating in the investment grade bond market. But 48.3% of the bonds purchased through the Fed’s secondary credit line, however, are triple-B rated.
For the week, the DIA Jones Industrial Average DJIA,
lost 3.3%, the S&P 500 SPX,
noticed a 2.9% decrease, and the Nasdaq COMP
fell 1.9% for the period.