By Jason Douglas and Jon Sindreu 

LONDON--U.S. tech giant Apple Inc. and German auto maker Daimler AG are among a host of non-British companies whose debt is eligible for the Bank of England's corporate-bond-buying program, the central bank said Monday.

The BOE published a list of around 300 securities it can buy in a GBP10 billion ($13.3 billion) program scheduled to begin Sept. 27 and run for 18 months. The list is made up of bonds issued by more than 100 companies, many of which have significant operations in the U.K. but are headquartered overseas.

Other non-British names on the BOE's shopping list include U.S. biotechnology firm Amgen Inc., French utility Électricité de France SA and Danish energy firm Dong Energy AS.

The inclusion of non-British names underscores the unusual lengths some central banks are going to in an effort to stimulate sluggish economies. The U.K. has long been a magnet for foreign investment, and the BOE said the principle criterion for inclusion is that the issuer makes "a material contribution to the U.K. economy." The issuer's debt must also be high-quality investment grade and denominated in sterling.

Plenty of British firms make the cut, including newspaper publisher Daily Mail & General Trust PLC, whose flagship title The Daily Mail supported the U.K.'s exit from the European Union in a referendum in June. Bonds from oil giant BP PLC and drug makers GlaxoSmithKline PLC and AstraZeneca PLC are also included. Financial firms are excluded.

In setting its eligibility criteria, the BOE has taken a page from the Bank of Japan's playbook . Japanese officials' purchases aim to support firms that are "proactively investing in physical and human capital" and "enhance their growth potential through effective corporate governance," among other criteria. The BOJ still doesn't directly invest in these corporations. Rather, it buys shares in exchange-traded funds that track stock indexes that officials deem eligible.

The European Central Bank, which is also engaged in corporate bond purchases, buys euro-denominated bonds of non-bank corporations established in the euro area.

The BOE's corporate bond-buying program is part of a multipronged stimulus effort announced last month in the wake of the U.K.'s decision to leave the EU.

The central bank also revived a crisis-era government bond-buying program, cut its benchmark interest rate to a new low of 0.25% and lined up cheap four-year loans for banks to cushion the economy from a possible slowdown.

Officials fret that uncertainty over the U.K.'s future economic ties to its largest trading partner may weigh on spending and investment, although a recent run of data suggest the economy has weathered the initial surprise of the result reasonably well.

Most BOE officials have high hopes for the corporate-bond plan, even though it is a relatively small slice of their planned purchases overall. BOE Gov. Mark Carney, in testimony to lawmakers Wednesday, said the plan had already led to an uptick in corporate-bond issuance. The theory is that the policy lowers borrowing costs for companies and should hopefully spur investment.

Some officials and economists have reservations, though. Kristin Forbes, a member of the BOE's rate-setting panel who opposed the purchases, told lawmakers there is a risk the BOE may end up buying the bonds of firms about which there are "bad headlines."

Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, added there is no guarantee the companies whose debt is purchased will make new investments in the U.K. "What they can't do is trace where the money goes," he said.

Write to Jason Douglas at jason.douglas@wsj.com and Jon Sindreu at jon.sindreu@wsj.com

 

(END) Dow Jones Newswires

September 12, 2016 15:31 ET (19:31 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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