The pace of CBPP3 portfolio growth remained steady last week, as it increased Eu2.102bn, but an increase of Eu6.869bn across November made it the slowest whole month since the programme began, while PSPP portfolio growth hit record highs.

Figures released yesterday (Monday) afternoon show that settled and outstanding purchases under the third covered bond purchase programme increased from Eu137.821bn to Eu139.923bn in the week to last Friday, with portfolio growth down from Eu2.127bn to Eu2.102bn in the previous reporting period.

Analysts estimated that Eu1.1bn-Eu1.3bn of last week’s settled issuance was bought on the primary market, implying average daily secondary market purchases of Eu150m-Eu200m, up from Eu49m-Eu125m in the previous reporting period.

The ECB also released month-end figures on CBPP3 yesterday, which confirmed that, as analysts had expected, the CBPP3 portfolio grew by less than Eu7bn in November, with purchases increasing by Eu6.869bn. This represents the lowest growth across a whole month since the programme began.

“In our view, however, this is not at all a sign that the CBPP3 will be phased out,” said Florian Eichert, head of covered bond and SSA research at Crédit Agricole.

He said CBPP3 portfolio growth could decrease from Eu10bn per month in 2015 to Eu7.5bn-Eu8bn in 2016, but that the Eurosystem is unlikely to phase out any one of its three purchase programmes, even after expanding the public sector purchase programme (PSPP) to include municipal bonds last week.

“Adding regions is mostly a measure to give the Bundesbank more flexibility to keep going for longer, rather than a major shift in the QE programme,” said Eichert, “so the Eurosystem will continue to focus on covered bonds throughout 2016.”

The figures also showed that 74.73% of the CBPP3 portfolio had been bought on the secondary market as at the end of November, and 25.27% on the primary market.

The PSPP portfolio increased Eu16.459bn last week and grew by Eu55.1bn in November, which analysts said are the largest increases under the programme. Anders Møller Lumholtz, chief analyst at Danske, attributed the record to frontloading that has been flagged by the ECB ahead of a two week year-end suspension of purchases.