The CPFF was created on October 27, 2008 and funded a special purpose vehicle (SPV) that purchased three-month unsecured and asset-backed commercial paper (CP) from eligible issuers.
[1] The CPFF began operations on October 27, 2008 following the collapse of Lehman Brothers and government bailout of AIG and the global credit freeze that ensued.
The CPFF method of short-term funding provided liquidity to U.S. issuers of commercial paper through a special purpose vehicle, aka SPV, which bought unsecured and asset-backed commercial paper for 3-month period from eligible issuers with funds made available by the NY Fed.
[citation needed] As part of the application process to be eligible for this program issuers had to pay a 10 basis point (0.1%) fee based on their maximum CP balance during the active period mentioned above.
[3] On 17 March 2020, following a global stock market crash and Russia–Saudi Arabia oil price war, and in light of a corporate debt bubble and wider financial turmoil resulting from the COVID-19 pandemic, the Fed announced that they would utilize the CPFF.