BlueCrest also took an interest in Churchill Capital Corp, a Special Purpose Acquisition Company, led by Michael Klein, a former top executive at Citigroup with 35 years experience in the banking industry.
ZeroHedge, 04/09/2020 – 15:10, following the feds decision to include high yield corporate bonds to their bond buying bailout program:
“Translation: buy JNK with leverage as market prices are now terminally disconnected from underlying fundamentals.”
The Facility will not purchase shares of a particular ETF if after such purchase the Facility would hold more than 20 percent of that ETF’s outstanding shares.
The maximum amount of bonds that the Facility will purchase from the secondary market of any eligible issuer is also capped at 10 percent of the issuer’s maximum bonds outstanding on any day between March 22, 2019 and March 22, 2020.
The maximum amount of instruments that the Facility and the PMCCF combined will purchase with respect to any eligible issuer is capped at 1.5 percent of the combined potential size of the Facility and the PMCCF.
(both facilities combined amount to $750 billion, so when they say 1.5%, it means they can only buy $7.5 billion worth of bonds in one specific company)
The initial allocation of the equity will be $50 billion toward the PMCCF and $25 billion toward the Facility. The combined size of the Facility and the PMCCF will be up to $750 billion.
Leverage: The Facility will leverage the Treasury equity at 10 to 1 when acquiring corporate bonds of issuers that are investment grade at the time of purchase and when acquiring ETFs whose primary investment objective is exposure to U.S. investment-grade corporate bonds.
The Facility will leverage its equity at 7 to 1 when acquiring corporate bonds of issuers that are rated below investment grade at the time of purchase and in a range between 3 to 1 and 7 to 1, depending on risk, when acquiring any other type of eligible asset.