The European Central Bank sold down its entire holding of bonds from Glencore last week after the company relocated a finance entity to Jersey, data released from the central bank on Monday showed.
The ECB had previously bought the bonds under its corporate sector purchase programme (CSPP), in which the central bank purchases the debt of investment-grade companies as part of its quantitative easing programme.
The ECB sold the bonds as the commodities house in September moved the domicile of its bond-issuing entity from Luxembourg to Jersey, taking it outside the euro-area and making it ineligible for the programme.
While the ECB has previously announced that it would not be forced to sell bonds if a company’s rating fell below investment grade, it has not previously commented on what would happen if a company changed its domicile.
“The Eurosystem decided to sell its Glencore holdings purchased under the CSPP because these bonds had lost their (CSPP and collateral) eligibility due to the re-domiciliation of the issuer to a non-euro area country,” a spokesman from the ECB told the FT on Monday.
While the ECB does not disclose the size of its holdings of debt from different companies, every week the central bank publishes a list of ISINs – unique identifiers for different bonds – that it holds. While the list for the week ending November 17 showed that the ECB held five different Glencore bonds, the data from the week ending November 24 contains no Glencore securities.