The cumulative share of primary market purchases in the ECB’s second covered bond purchase programme fell from 44.2% to 40% through March, with the central bank having bought only Eu406m of new issues – equivalent to approximately 1% of its Eu40bn of firepower.

According to figures from the ECB, as of 31 March Eu3.683bn of purchases were in the primary market and Eu5.525bn, or 60% of the cumulative total, were in the secondary. The Eu3.683bn of primary market purchases is an increase from Eu3.277bn at the end of February.

The fall in the primary market’s share came after it had increased from 40% to 44.2% through February. A Bundesbank official had in early February said that CBPP2 is much more focused on the primary market than CBPP1, when only 27% of some Eu60bn of purchases were in the primary market.

“We expected at the beginning of last month,” said RBS analysts yesterday (Monday), “that the share between primary and secondary should move closer to 50:50 by the end of March. However, we also said that this will depend on sufficient eligible new issuance.

“Given the lack of Eurozone issuance and the strong demand for those deals, there was no need for the ECB to step in.”

The Financial Times reported on 22 March that an early end to the CBPP2 was under consideration, with many observers having commented on how far the ECB is behind the average daily run-rate necessary for it to reach the Eu40bn figure announced for the programme. With the total at Eu9.192bn* today (Tuesday), after an increase of Eu1m was reported this morning, the ECB is Eu7.928bn behind such a theoretical schedule, according to RBS figures.

At a European Covered Bond Council plenary meeting last Thursday, Francesco Papadia, ECB director general for market operations, acknowledged that purchases had been at a slower pace than could be inferred from a mechanistic forecast of spending under the programme. But he said that in spite of this, CBPP2 had, alongside other non-standard measures, achieved the ECB’s aims, and noted that the volume of issuance had increased since the programme was announced, while prices had improved, with the “revitalisation” of covered bonds not coming at the expense of the senior unsecured market.

The second purchase programme has “fulfilled its purpose”, he said.

He did not, however, comment on whether or not the Eu40bn figure would be hit, or any consideration that might have been given to ending the programme early.

*The total reported by the ECB today, corresponding to purchases settled as of yesterday (2 April) is lower than that given for the total as of 31 March in its breakdown of purchases. The ECB has acknowledged that this is “unusual” and we are awaiting its considered response.