Changes to CCFF, the UK Government’s large business support scheme

United Kingdom

Changes have been announced today to the Covid Corporate Financing Facility (CCFF), the UK Government’s liquidity support scheme for larger businesses involving the purchase of commercial paper, a type of debt instrument.

The main changes announced by the Bank of England and HM Treasury today are that:

  • certain businesses using the scheme will now need to commit to show “restraint” on the payment of dividends and on senior pay. The restrictions apply if CCFF borrowings are outstanding that have a maturity date of 19 May 2021 or later. This is likely to mean that companies with such CCFF borrowings will not be able to make distributions to shareholders (including payment of dividends or share buybacks) and will not be able to increase pay or pay cash bonuses to senior management, including the board
  • names of businesses borrowing under the CCFF and the amount of their outstanding borrowing will be released on a weekly basis from the start of June. The confidentiality undertakings entered into when signing up to the CCFF have been amended as a result. This change increases transparency but also reflects challenges faced by businesses considering the CCFF, many of whom are listed businesses under an obligation to disclose price-sensitive information to the market

A new Market Notice has also been released. It consolidates key information about the CCFF in a single place following various amendments and clarifications to the scheme that had been announced since the scheme was originally launched in March.

We have updated our detailed note on the CCFF to reflect these developments. It is available here and contains: details of the CCFF including eligibility requirements; information about commercial paper programmes; and steps businesses should take if they are considering accessing the CCFF.

For further information, please contact any of us.