Corporate bond spreads had risen sharply before the PEPP announcement (slide 5, left chart). Increased purchases of corporate bonds under both the APP and the PEPP have visibly contributed to stabilising credit spreads for both investment grade and high yield issuers and stimulating bond issuance (slide 5, left and right chart).
The strong revival of the primary market for corporate bond issuance has been an important pillar for supporting liquidity buffers of cash-strapped firms, also in view of the evidence that firms have started to heavily draw down bank credit lines, which is weighing on bank capital.