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As of December 31, 2020, the SMCCF has ceased purchasing eligible assets and on June 7, 2021, it will begin winding down the portfolio.
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The SMCCF, which was announced on March 23, 2020, supported market liquidity for corporate debt by purchasing corporate bonds and exchange-traded funds (ETFs) in the secondary market through the date of its closure on December 31, 2020. As specified in the term sheet, the SMCCF purchased corporate bonds to create a corporate bond portfolio that was based on a broad, diversified market index of U.S. corporate bonds and purchased U.S.-listed ETFs whose investment objective was to provide broad exposure to the market for U.S. corporate bonds.
The SMCCF will begin gradual and orderly sales of its holdings of corporate bond ETFs on June 7, 2021 and of its holdings of corporate bonds on July 12, 2021. Subject to market conditions, the SMCCF expects to complete the sale of its holdings by the end of 2021.
To establish the facility, the Federal Reserve Bank of New York financed a special purpose vehicle (SPV) to purchase eligible corporate bonds and eligible ETFs in the secondary market. The Department of the Treasury made an equity investment in the SPV. The SMCCF was established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary.
- Program Terms and Conditions
- Frequently Asked Questions
- Seller Certification Materials
- Eligible Sellers
- Composition of the SMCCF Broad Market Index
- Competitive Procurement Process for Certain Vendor Roles Supporting Emergency Lending Facilities and Programs
On March 24, 2020, the New York Fed retained BlackRock Financial Markets Advisory as a third-party vendor to serve as the investment manager for this facility. BlackRock was selected for this role after considering its expertise with purchasing large amounts of all relevant types of corporate debt issuance and corporate bonds in the secondary market, deep knowledge and substantial experience in the corporate debt markets, and robust operational and technological capabilities. On February 4, 2021, the New York Fed notified BlackRock that it would be replacing BlackRock as the cash investment manager and had identified a new vendor to perform that role going forward.
On April 15, 2020, the New York Fed retained State Street Bank & Trust Company (State Street) as a third-party vendor to serve as the custodian and administrator for this facility. State Street was selected for this role after evaluating its response to a request for proposals (RFP), which considered implementation and operational capabilities, as well as overall qualifications needed to support the facility.
On February 8, 2021, the New York Fed announced it had engaged Payden & Rygel as a third party vendor to serve as cash investment manager for this facility. Payden & Rygel was selected following the completion of a previously announced competitive procurement process.
Quarterly reports on the costs associated with the vendors supporting this facility are available in Vendor Information.
- Administration Agreement
(Updated March 1, 2021) - Cash Investment Management Agreement
- Control Agreement
- Credit Agreement
(Updated March 1, 2021) - Custodian Agreement
(Updated March 1, 2021) - Investment Management Agreement
(Updated June 3, 2021) - Investment Memorandum of Understanding
- Legal Services Engagement Letter
- Limited Liability Company Agreement
(Updated January 7, 2021) - Preferred Equity Account Agreement
- Preferred Equity Investments Agreement
- Security Agreement
- State Street Fee Letter
