In response to the Covid-19 pandemic, central banks across the world set out a range of monetary stimulus packages. One such scheme is the European Central Bank’s Pandemic Emergency Purchase Programme (“PEPP”), aimed at supporting Eurozone monetary policy during the crisis.
Purchases under the PEPP will continue until at least June 2021, meaning that it will likely outlive the Brexit implementation period, due to expire on 31 December 2020. It is also likely that even when the PEPP is wound down, the ECB’s asset purchase programmes (initiated in 2014) will continue in some form for the foreseeable future. In any event some issuers may continue to want to structure their debt offerings to ensure that they meet the ECB’s criteria for eligible collateral.
Because some of the ECB eligibility criteria contain jurisdictional restrictions, a question for corporate issuers who wish to access the CSPP or meet the ECB eligibility criteria is how the expiry of the Brexit implementation period may impact the analysis.
The move to increase the ECB’s pandemic emergency purchase programme (PEPP) was larger than most economists’ expectations, taking it to €1.35tn in total. The ECB also extended the scheme until at least June 2021, leaving it on track to buy a record €1.4tn of assets this year across all its stimulus programmes.