CBPP3 portfolio growth slowed as expected last week on the back of a slump in primary market supply, with settled and outstanding purchases increasing by Eu1.377bn, while the estimated pace of secondary purchases remained around half of the long term average.

Figures released by the European Central Bank yesterday (Monday) afternoon show that the portfolio for its third covered bond purchase programme (CBPP3) increased from Eu131.144bn to Eu132.521bn in the week to last Friday. Settled and outstanding purchases had increased by Eu3.011bn in the previous reporting period.

The week’s Eu1.377bn figure is the lowest reported since 7 September, when portfolio growth fell to Eu1.099bn before it rebounded on the back of a post-summer reopening of the primary market.

Analysts said that the more modest figure was expected, as a Eu1bn five year issue from Banco Sabadell was the only CBPP3-eligible deal to settle last week Estimating that the Eurosystem bought around 40% of the deal, analysts said that secondary market purchases last week averaged at around Eu190m-Eu195m per day, which, they said, is around half of the average rate over the programme’s lifetime.

Because analysts’ estimates of the pace of primary market buying in the week before last varied, the Eu190m-Eu195m figure was interpreted by some as being an increase from around Eu105m per day in the week before last and by others as being a slight decrease.

The public sector purchase programme (PSPP) portfolio increased Eu12.929bn in the week to last Friday, to Eu406.566bn. Settled and outstanding purchases had risen Eu10.567bn in the previous week.