A $1 trillion deal to borrow money to buy back bonds issued by an investment bank is set to become a reality within days.
The $1,085 billion in the U.S. government-backed bonds will be sold on the London Stock Exchange as part of the first $20 billion swap deal, said Jamie Bresnahan, a spokesman for the New York Federal Reserve.
The bonds will mature at the end of 2020 and be purchased by private investors who then use the proceeds to pay back bondholders, Bresneahan said.
The deal is expected to be completed within days, he said.
The swaps were set to be approved by the Federal Reserve on Thursday, which is expected in the next few days.
The New York Fed would be acting as a clearinghouse for the swaps, Bausch said.
It’s the first of two similar deals expected to become law in the coming weeks.
A similar swap deal between the U and Japan is expected this month.
Bresnahn said the Japanese government is also expected to approve a similar deal, although the terms of the deal are unclear.