European central bank announces pandemic emergency purchase program

• The issuer has to be incorporated in the euro area (even if the ultimate parent is not based in the euro area, but if this is the case then all the other eligibility criteria will have to be satisfied).

The issuer cannot:

• be a credit institution or have any parent undertaking (as defined in Article 4(15) of the Capital Requirements Regulation) which is a credit institution (as defined in Article 2(14) of Guideline ECB/2014/60);
• have a parent company which is subject to banking supervision outside the euro area;
• be an investment firm within the meaning of Article 4(1)(1) of Directive 2014/65/EU of the European Parliament and of the Council; 
• be a supervised entity as defined in Article 2(2) of Regulation (EU) No. 468/2014 of the European Central Bank (ECB/2014/17) or a member of a supervised group as defined in Article 2(21) of Regulation (EU) No. 468/2014 (ECB/2014/17), in each case as contained in the list published by the ECB on its website in accordance with Article 49(1) of Regulation (EU) No. 468/2014 (ECB/2014/17), and may not be a subsidiary, as defined in Article 4(1)(16) of Regulation (EU) No. 575/2013, of any of those supervised entities or supervised groups;
• be an entity, whether publicly or privately owned, that: (i) has as its main purpose the gradual divestment of its assets and the cessation of its business; or (ii) is an asset management or divestment entity established to support financial sector restructuring and/or resolution;
• have issued an asset-backed security, a multi cédula, or a structured covered bond; and
• be an eligible issuer for the PSPP.

• Must be euro denominated and have a minimum remaining maturity of six months and a maximum remaining maturity of less than 31 years (i.e. purchases of securities with a remaining maturity of 30 years and 364 days are possible) at the time they are bought.
• The debt instruments issued by corporations must also comply with the eligibility criteria for marketable assets for Eurosystem credit operations (including being issued in New Global Note form (if bearer bonds) or being note issued through the new safekeeping structure (if registered bonds)).

•  Eurozone banks.

• Only credit assessment information that is provided by an external credit assessment institution accepted within the Eurosystem credit assessment framework will be taken into account for the assessment of the credit quality requirements of the marketable debt instrument.

• Issuers under the PSPP are central, regional or local governments of a Member State whose currency is the euro, recognised agencies located in the euro area, international organisations located in the euro area and multilateral development banks located in the euro area.

• Must comply with the eligibility criteria for marketable assets for Eurosystem credit operations pursuant to Part Four of Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60) subject to Article 1 of Decision (EU) 2016/702.
• Must have a minimum remaining maturity of one year (i.e. purchases of securities with a remaining maturity of 364 days are NOT possible) and a maximum remaining maturity of less than 31 years (i.e. purchases of securities with a remaining maturity of 30 years and 364 days are possible).

• Eurozone banks.
• Any other counterparties that are used by Eurosystem central banks for the investment of their euro-denominated investment portfolios.

• An eligible issuer is an issuer of an asset backed security (ABS) which is established in the euro area.
• The issuer is not an entity, whether publicly or privately owned, that: (a) has as its main purpose the gradual divestment of its assets and the cessation of its business; or (b) is an asset management or divestment entity established to support financial sector restructuring and/or resolution, including asset management vehicles resulting from a resolution action in the form of the application of an asset separation tool pursuant to Article 26 of Regulation (EU) No 806/2014 of the European Parliament and of the Council or national legislation implementing Article 42 of Directive 2014/59/EU of the European Parliament and of the Council.

• Must comply with the eligibility criteria for eligible collateral under the collateral framework for Eurosystem credit operations. (including being issued in New Global Note form (if bearer bonds) or being note issued through the new safekeeping structure (if registered bonds)). An ABS that is eligible as collateral is not automatically also eligible for purchases under the ABSPP;
• Must be euro denominated;
• Must be secured by claims against non-financial private sector entities resident in the euro area of which a minimum share of 95 percent is euro denominated and of which a minimum share of 95 percent are resident in the euro area; and

• Must have a second-best credit assessment of at least CQS3, currently equivalent to an ECAI rating of BBB-/Baa3/BBBL.

Note: The position on credit assessment is to apply slightly different criteria for ABSs with underlying claims against non-financial private sector entities resident in Greece or Cyprus.

• Eurozone banks.
• Any other counterparties that are used by Eurosystem central banks for the investment of their euro-denominated investment portfolios.

• An eligible issuer is a euro area credit institution or, in the case of multi-cédulas, by special purpose vehicles incorporated in the euro area.

The issuer must not be an entity, whether publicly or privately owned, that:

• has as its main purpose the gradual divestment of its assets and the cessation of its business; or
• is an asset management or divestment entity established to support financial sector restructuring and/or resolution.
• The issuer of the covered bonds is not an entity, whether publicly or privately owned, that: (a) has as its main purpose the gradual divestment of its assets and the cessation of its business; or (b) is an asset management or divestment entity established to support financial sector restructuring and/or resolution, including asset management vehicles resulting from a resolution action in the form of the application of an asset separation tool pursuant to Article 26 of Regulation (EU) No. 806/2014 of the European Parliament and of the Council or national legislation implementing Article 42 of Directive 2014/59/EU of the European Parliament and of the Council.

• Must be eligible under the collateral framework for Eurosystem credit operations (including being issued in New Global Note form (if bearer bonds) or being note issued through the new safekeeping structure (if registered bonds));
• Must be euro denominated and held and settled in the euro area;
• Must have underlying assets that include exposure to private and/or public entities; and
• Must have a minimum first-best credit assessment equivalent to BBB-.

Note: The position on credit assessment is to apply slightly different criteria for covered bonds which currently do not achieve the CQS3 rating in Cyprus and Greece

• Eurozone banks.
• Other counterparties that are used by Eurosystem central banks for the investment of their euro-denominated investment portfolios, including non-euro area counterparties active in covered bonds.