Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of (a) removing or (b) lowering the credit rating eligibility threshold for the Covid Corporate Financing Facility to enable larger corporates without the requisite credit rating to gain access to that scheme.

The facility is open to firms that can demonstrate they were in sound financial health prior to the shock, allowing the Government to look through temporary impacts on firms’ balance sheets and cash flows from the shock itself. If a firm believes it is the equivalent of investment grade, there are now two ways in which a firm can demonstrate this in order to be eligible for the CCFF:

• The company should speak to their bank, and if their bank’s advice is that the firm was viewed internally as investment grade as of 1st March, they should contact the Bank of England (CCFFeligibleissuers@bankofengland.co.uk). The BoE will then draw on a range of information, including banks’ internal ratings of a firm, to check whether the firm is equivalent to investment grade.

• The company or their bank can speak to the major credit ratings agencies to secure an assessment of credit quality in a form that can be shared with the BoE and HMT. Credit ratings agencies have been primed to process these assessments much more quickly than they normally take.

The CCFF is just one of a number of schemes; and the government has also launched the CBILS and CLBILs schemes, as well as making VAT deferral available, and protecting commercial leaseholders against automatic forfeiture for non-payment. Together the CBILS, CLBILS and CCFF ensure almost all viable UK businesses can apply for a government backed loan.