CARES Act Corporate Credit Facilities: 28 Weeks Later

The market structure for institutions to participate in the corporate debt market will likely continue to mature.

Boston, December 1, 2020 – The events in March 2020 were a true test of the North American corporate bond market structure. And the Federal Reserve’s actions were swift, aggressive, and effective. The Fed’s response calmed the markets, which started to tamp down volatility and compress spreads to more normal levels. While the market performed well overall, the stress revealed some of its shortcomings. What impact can these actions have on the market, and what does the future of the market hold with the Fed’s intervention in the corporate bond market?

This Impact Report discusses the market’s events related to the COVID-19 crisis and the Fed’s response to support the corporate bond market. It is based on desk research of nearly 10 research reports, speeches, webinars, government documentation, and articles as well as six interviews with research analysts, portfolio managers, traders, attorneys, and fintech executives from across North America conducted from June to September 2020.

This 37-page Impact Report contains 17 figures and four tables. Clients of Aite Group’s Institutional Securities & Investments service can download this report, the corresponding charts, and the Executive Impact Deck.

This report mentions Amherst Pierpont Securities, Bank of Japan, Barclays Capital, BlackRock, Bloomberg, BMO Capital Markets Corp., BNP Paribas Securities Corp., BofA Securities, Cantor Fitzgerald & Co., CBOE, Citigroup Global Markets, Credit Suisse Securities, Daiwa Captal Markets America, Deutsche Bank Securities, Federal Reserve Bank of St. Louis, Franklin Templeton, Goldman Sachs & Co., HSBC Securities, ICE Data Services, J.P. Morgan Securities, Jane Street Execution Services, Jefferies, Liquidnet, MarketAxess, Mizuho Securities, Morgan Stanley, NatWest Markets, RBC Capital Markets, Scotia Capital, SG Americas, State Street, SumRidge Partners, TD Securities, Tradeweb, Vanguard, VanEck, UBS Securities, United States Federal Reserve System, and Wells Fargo Securities.

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