The Federal Reserve Board plans to begin gradually selling a portfolio of corporate debt purchased through an emergency lending facility launched last year, as the COVID-19 pandemic was spreading panic through financial markets.

“Portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange traded funds and corporate bonds,” the Fed said in a statement on Wednesday.

The New York Fed will provide additional details before sales begin, it added.

There was around $13.7 billion outstanding in the Fed’s Secondary Market Corporate Credit Facility in a range of corporate bond and ETF holdings, according to balance sheet details updated last week.

The Fed plans to start the process with ETFs — with the selling of corporate bonds to begin later in the summer. The aim is to complete the exercise by the end of the year.

A Federal Reserve spokeswoman said the portfolio wind down has nothing to do with monetary policy, and it is not a signal about monetary policy.

The announcement comes at a sensitive time for the Fed as markets are expecting the central bank to start debating scaling back its $120 billion in monthly asset purchases in coming months.

Wednesday’s announcement — concerning a facility who’s size is tiny in the context of an almost $8 trillion Fed balance sheet — shows some urgency by the Fed Board to wind down emergency facilities if possible.

The secondary corporate credit facility was launched in March 2020 to support financing for hundreds of large employers. It was an unusual step for the Fed in that it didn’t extend a loan as it typically does with its emergency powers but instead became a buyer of last resort in secondary markets. While relatively small, the Fed backstop brought buyers back into the market and allowed companies to finance billions of dollars in credit.

In another unprecedented step, the Fed also dipped into lower quality junk credits, partly by purchasing ETFs that concentrated on junk credits.

The corporate credit facility stopped purchasing assets at the end of 2020.

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