Credit market round up: Fed provides money market liquidity

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Credit market round up: Fed provides money market liquidity

In an attempt to boost liquidity to financial institutions the US Federal Reserve has unveiled a scheme to support money market investors. Money Market Investor Funding will buy $540 million of short-term (up to three months) bank paper from funds. The Fed has created 10 private sector SPVs that can buy paper issued by up to 10 financial institutions – with concentration limits of 15%. Funds that sell into this programme receive 90% of the purchase price in cash and the rest as ABCP – which is effectively a first loss tranche for the individual SPV.

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