It suggests that bailouts will be provided to BBB (and higher) rated companies. So that would suggest that shorting BB (and below) rated companies is far safer than shorting investment grade companies.
It seems that today's announcements reiterate the idea that bailouts are available for BBB and higher rated companies.
ZH article at 8.44am on Thursday April 9
https://www.zerohedge.com/economics/fed-unveils-new-bailout-program-will-inject-23-trillion-loans
ZH article at 9.37am on Thursday April 9
https://www.zerohedge.com/markets/free-markets-are-dead-fed-start-buying-junk-bonds-junk-etfs
Why March 22? Because Ford was downgraded on March 24, and as a result its bonds are surging.
Federal Reserve announcement at 8.30am on Thursday April 9
"Federal Reserve takes additional actions to provide up to $2.3 trillion in loans to support the economy"
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm
Term sheet of primary market facility
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a5.pdf
1. The issuer is a business that is created or organized in the United States or under the laws of the United States with significant operations in and a majority of its employees based in the United States.
2. The issuer was rated at least BBB-/Baa3 as of March 22, 2020, by a major nationally recognized statistical rating organization (“NRSRO”). If rated by multiple major NRSROs, the issuer must be rated at least BBB-/Baa3 by two or more NRSROs as of March 22, 2020.
a. Issuers that were rated at least BBB-/Baa3 as of March 22, 2020, but are subsequently downgraded, must be rated at least BB-/Ba3 at the time the Facility makes a purchase. If rated by multiple major NRSROs, such issuers must be rated at least BB-/Ba3 by two or more NRSROs at the time the Facility makes a purchase.
b. In every case, issuer ratings are subject to review by the Federal Reserve.
Term sheet of secondary market facility
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a2.pdf
1. The issuer is a business that is created or organized in the United States or under the laws of the United States with significant operations in and a majority of its employees based in the United States.
2. The issuer was rated at least BBB-/Baa3 as of March 22, 2020, by a major nationally recognized statistical rating organization (“NRSRO”). If rated by multiple major NRSROs, the issuer must be rated at least BBB-/Baa3 by two or more NRSROs as of March 22, 2020.
a. An issuer that was rated at least BBB-/Baa3 as of March 22, 2020, but was subsequently downgraded, must be rated at least BB-/Ba3 as of the date on which the Facility makes apurchase. If rated by multiple major NRSROs, such an issuer must be rated at least BB-/Ba3 by two or more NRSROs at the time the Facility makes a purchase.
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From ZH:
Why March 22? Because Ford was downgraded on March 24, and as a result its bonds are surging.