Fed Enlists BlackRock In Its Massive MBS Debt-Buying Program

“The New York Fed plans to buy about $50 billion of agency mortgage-backed securities
every day this week.”

Fed Enlists BlackRock In Its Massive Debt-Buying Programs

(Bloomberg) — The Federal Reserve tapped BlackRock Inc. to shepherd several debt-buying programs on behalf of the U.S. central bank as it works to revive an economy reeling from the spread of coronavirus.

BlackRock, the world’s largest asset manager, will serve as an investment adviser and manage assets for three separate programs, the New York Fed said Tuesday. Those include two new facilities the central bank announced Monday to provide liquidity to corporate borrowers, as well as purchases of agency commercial mortgage-backed securities.

The New York Fed said BlackRock was chosen for the role “after considering their 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.”

The central bank has taken a dizzying number of steps in the past three weeks to help support the flow of credit in financial markets and the economy.

In a surprise announcement Monday, it said it would make unlimited purchases of Treasury bonds and mortgage-backed securities, while adding that it would also begin buying agency commercial mortgage-backed securities. The New York Fed plans to buy about $50 billion of agency mortgage-backed securities — which are issued by housing-market giants including Fannie Mae and Freddie Mac — every day this week.

Read more at: https://www.bloombergquint.com/onweb/fed-hires-blackrock-for-agency-cmbs-corporate-debt-programs

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