In April 2020, the Bank of England accepted BASF as an eligible counterparty with a solid A-rating. BASF subsequently issued commercial paper to the Bank of England in the amount of $1.25bn maturing in March 2021. This transaction is based on the initial terms of the Covid Corporate Financing Facility (CCFF), which was published by the UK Treasury on 17 March 2020 to provide liquidity in the financial markets.
Purchases of commercial paper are customary financial market transactions. The transaction with the Bank of England does not include any conditions that restrict capital distributions, or senior management remuneration. BASF pays interest on the outstanding commercial paper. Thus, the transaction with the Bank of England under BASF’s existing commercial paper programme does not have the character of state aid.
BASF preferably meets its external financing needs on the international capital markets. The company’s global commercial paper programme, which has an issuing volume of up to $12.5bn, is used for short-term financing. BASF has been active in the US commercial paper market for more than 20 years. In 2020, the company also started to issue on the European commercial paper market.
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