by Wolf Richter, Wolf Street:
Here are the 84 companies whose bonds the Fed bought, and the 16 bond ETFs it now holds.
The Federal Reserve disclosed Sunday afternoon the amounts and the company names of the corporate bonds that it started buying for the first time ever in the week ended Friday, June 19. They’re not even rounding errors on the Fed’s balance sheet. The purchases of individual corporate bonds amounted to $428 million (with an M). By comparison, in the week ended April 1, when the Fed was doing a lot of heavy breathing, it bought $362 billion (with a B) of Treasury securities.
In addition, the Fed said in the disclosure that it held a total of $6.8 billion in bond ETFs as of June 19, up from $1.5 billion a month ago.
These bond ETFs and individual corporate bonds combined account for 1/10th of 1% of the Fed’s $7.1 trillion in total assets.
The Fed buys these corporate bonds and bond ETFs in its Special Purpose Vehicle that it calls Secondary Market Corporate Credit Facility (SMCCF). Like the Fed’s other alphabet-soup bailout SPVs, the SMCCF is an LLC entity.
The SPV is funded in two ways: One, with equity capital provided by the US Treasury Department, or rather by taxpayers, or rather by government borrowing, to cushion the Fed against losses; and two, by loans from the Fed at a leverage of 10 to 1. Then the SPV buys corporate bonds and bond ETFs in the open markets via the Fed’s primary dealers. The New York Fed handles all the details.
All these purchases and holdings were already reflected on the Fed’s prior weekly balance sheets in terms of the total amounts. Today’s disclosure just provides the company-specific details.
The bonds that the Fed purchased were issued by 84 companies, in industries ranging from tobacco to video games, across the spectrum of US companies, and US subsidiaries of foreign companies (such as Toyota’s US finance subsidiary). The issuers include several of Warren Buffett’s companies, all kinds of energy companies, and some junk-rated companies, such as Ford.
In terms of junk bonds, there isn’t much. Only 3.62% of its bond portfolio is now rated BB (BB+ , BB, BB-), the top category of junk. This includes Ford (BB+ ). The Fed did not buy any bonds rated CCC or below. With 3.62% of the total corporate bond portfolio ($428 million) being junk bonds, the amount of junk bonds it holds come to $15.5 million.
The categories AAA, AA, and A account for 48.07% of the bonds. The category of BBB, the lowest investment-grade category, accounts for 48.31%.
The average maturity of the bonds is 3.3 years, ranging from 11 months (a Chevron bond that matures in May 2021) to five years (a Honeywell bond that matures in June 2025). Significantly, there are no long-dated maturities in this portfolio.
When these bonds mature, the company pays the Fed face value of the bonds, and the bond disappears off the Fed’s balance sheet. If the maturing bond is not replaced, the SPV can use the proceeds to pay down the loan the Fed issued.
By keeping maturities in the one-to-five-year range, the Fed appears to be setting the stage for letting the bonds roll off its balance sheet and be done with the program once the crisis is over.
AT&T is at the top of the list, with $16.5 million of bonds. The smallest position is Hyatt at $1.09 million – just symbolically dabbling here, really, since hotel bonds could get dicey.
There are also bonds from Southwest, but no bonds issued by American Airlines, Delta, or United, which would have spiced up the portfolio in a nerve-wracking manner for sure.
The table below shows the companies whose bonds the Fed purchased. If the Fed purchased several types of bonds from one company, or from a company’s subsidiary, I added them together. For example, the bonds of IBM Corp and IBM Credit are added together under “IBM.”
Issuer | Maturity Date | Purchase Amount $ | |
1 | AT&T INC | 07/15/2021 | 16,476,295 |
2 | UNITEDHEALTH GROUP | 07/15/2022 | 16,451,866 |
3 | COMCAST | 04/15/2024 | 13,315,347 |
4 | ANTHEM | 05/15/2022 | 12,937,096 |
5 | IBM | 05/13/2022 | 10,631,583 |
6 | MICROSOFT | 02/06/2022 | 8,855,357 |
7 | WALMART | 06/26/2023 | 8,758,532 |
8 | CONSTELLATION BRANDS | 02/15/2023 | 8,465,435 |
9 | FORD MOTOR COMPANY | 04/21/2023 | 8,051,573 |
10 | CVS HEALTH CORP | 03/25/2025 | 7,762,008 |
11 | BOEING CO | 05/01/2023 | 7,648,613 |
12 | GENERAL ELECTRIC CO | 09/07/2022 | 7,403,280 |
13 | ABBVIE INC | 10/01/2022 | 7,394,460 |
14 | MEDTRONIC INC | 03/15/2022 | 6,658,502 |
15 | COCA-COLA CO | 03/25/2025 | 6,652,748 |
16 | PEPSICO INC | 04/30/2025 | 6,637,973 |
17 | SABINE PASS LIQUEFACTION | 03/15/2022 | 6,512,097 |
18 | MCDONALD’S CORP | 01/15/2022 | 6,488,806 |
19 | BECTON DICKINSON AND CO | 06/06/2022 | 6,342,504 |
20 | PHILIP MORRIS INTL | 11/10/2024 | 6,236,320 |
21 | BERKSHIRE HATHAWAY ENERG | 04/15/2025 | 5,774,200 |
22 | PROLOGIS LP | 08/15/2023 | 5,622,744 |
23 | MARATHON PETROLEUM | 05/01/2025 | 5,543,247 |
24 | GENERAL MILLS | 10/17/2023 | 5,535,298 |
25 | FLORIDA POWER & LIGHT | 04/01/2025 | 5,506,758 |
26 | LOWE’S COS | 04/15/2022 | 5,492,097 |
27 | PFIZER INC | 09/15/2023 | 5,458,757 |
28 | SYSCO CORPORATION | 03/15/2025 | 5,452,704 |
29 | BP CAP MARKETS AMERICA | 04/06/2025 | 5,433,591 |
30 | MASTERCARD | 04/01/2024 | 5,430,832 |
31 | MARRIOTT INTERNATIONAL | 05/01/2025 | 5,416,798 |
32 | GILEAD SCIENCES | 09/01/2022 | 5,331,400 |
33 | EVERSOURCE ENERGY | 10/01/2024 | 5,312,492 |
34 | VISA INC | 12/14/2022 | 5,283,044 |
35 | EXXON MOBIL | 08/16/2024 | 5,211,729 |
36 | WALGREENS BOOTS ALLIANCE | 11/18/2021 | 5,169,408 |
37 | ENERGY TRANSFER OPERATNG | 01/15/2024 | 5,156,184 |
38 | DUPONT DE NEMOURS INC | 05/01/2023 | 5,122,159 |
39 | CHEVRON | 05/11/2025 | 5,113,264 |
40 | TOYOTA MOTOR CREDIT | 08/25/2023 | 5,070,899 |
41 | CATERPILLAR FINL SERVICE | 05/13/2022 | 5,045,104 |
42 | PACCAR FINANCIAL | 04/06/2023 | 4,756,010 |
43 | FOX CORP | 01/25/2024 | 4,509,400 |
44 | HEALTHPEAK PROPERTIES | 08/15/2024 | 4,469,758 |
45 | INTERCONTINENTALEXCHANGE | 10/15/2023 | 4,461,760 |
46 | FISERV INC | 10/01/2023 | 4,412,613 |
47 | DELMARVA PWR & LIGHT CO | 11/15/2023 | 4,383,302 |
48 | VMWARE INC | 05/15/2025 | 4,381,185 |
49 | 3M COMPANY | 04/15/2025 | 4,356,304 |
50 | EASTMAN CHEMICAL | 08/15/2022 | 4,238,120 |
51 | GEORGIA POWER CO | 07/30/2023 | 4,208,827 |
52 | HP ENTERPRISE CO | 04/01/2023 | 4,143,570 |
53 | CARGILL INC | 07/23/2023 | 4,078,236 |
54 | HUMANA INC | 04/01/2025 | 4,052,405 |
55 | AUTOZONE INC | 04/15/2025 | 3,376,393 |
56 | DTE ELECTRIC CO | 03/01/2025 | 3,373,695 |
57 | FEDEX CORP | 05/15/2025 | 3,360,613 |
58 | BURLINGTN NORTH SANTA FE | 09/01/2024 | 3,339,810 |
59 | VIRGINIA ELEC & POWER | 05/15/2025 | 3,300,755 |
60 | AVANGRID INC | 04/15/2025 | 3,288,007 |
61 | PROCTER & GAMBLE | 03/25/2025 | 3,266,060 |
62 | PHILLIPS 66 | 04/01/2022 | 3,227,510 |
63 | PAYPAL HOLDINGS | 10/01/2024 | 3,201,220 |
64 | UNITED PARCEL SERVICE | 04/01/2023 | 3,174,262 |
65 | HONEYWELL INTERNATIONAL | 06/01/2025 | 3,072,735 |
66 | DIAMONDBACK ENERGY INC | 12/01/2024 | 3,007,643 |
67 | CAMPBELL SOUP CO | 03/15/2025 | 2,847,410 |
68 | REALTY INCOME CORP | 08/01/2023 | 2,799,115 |
69 | CME GROUP INC | 03/15/2025 | 2,785,633 |
70 | FIRSTENERGY CORP | 03/15/2023 | 2,736,443 |
71 | REPUBLIC SERVICES INC | 08/15/2024 | 2,682,653 |
72 | EDISON INTERNATIONAL | 11/15/2024 | 2,651,085 |
73 | HOME DEPOT INC | 06/01/2022 | 2,613,999 |
74 | NUCOR CORP | 06/01/2025 | 2,584,961 |
75 | ARES CAPITAL CORP | 06/10/2024 | 2,562,600 |
76 | GENERAL MOTORS FINL CO | 03/20/2023 | 2,156,573 |
77 | NIKE INC | 03/27/2025 | 2,154,373 |
78 | DOLLAR GENERAL CORP | 04/15/2023 | 2,140,035 |
79 | WILLIAMS COMPANIES INC | 03/15/2022 | 2,103,140 |
80 | SOUTHWEST AIRLINES | 05/04/2023 | 2,102,015 |
81 | PHILLIPS 66 PARTNERS LP | 12/15/2024 | 2,069,484 |
82 | DUKE ENERGY CORP | 04/15/2024 | 1,663,630 |
83 | ACTIVISION BLIZZARD | 06/15/2022 | 1,558,645 |
84 | HYATT HOTELS CORP | 04/23/2025 | 1,090,262 |
At the end of May, the Fed disclosed that it had purchased $1.5 billion in corporate bond ETFs through May 18. Since then, the Fed has purchased more bond ETFs, and the market value as of June 18 of all its ETF holdings combined had increased to $6.8 billion.