The Bank of England is set to subsidise the state-owned French utility giant behind the Hinkley Point nuclear project, which has already secured government guarantees that could add £30 billion to the nation’s energy bills. EDF is expected to be one of the principal beneficiaries of the Bank’s corporate bond purchase scheme, a version of quantitative easing unveiled as part of its post-Brexit economic stimulus package last month. The Bank has pledged to buy up to £10 billion of corporate bonds over the next 18 months. To qualify, companies must have issued investment grade sterling bonds and must make “a material contribution to the UK economy”. EDF has £7.4 billion of sterling debt in the market, according to analysis by Morgan Stanley. Only about £100 billion of bonds will qualify, Mark Carney, the Bank’s governor told MPs yesterday, making EDF one of the largest potential beneficiaries. Other companies likely to meet the Bank’s criteria are Imperial Tobacco and BAT, the cigarette makers, as well as Vodafone, GlaxosmithKline and British Gas.
Times 8th Sept 2016 read more »