The CBPP3 portfolio grew at a faster rate last week in spite of a shortened, four day week, increasing Eu2.331bn on the back of a surge in issuance. With the ECB’s monthly QE target to increase to Eu80bn from next month, some analysts said purchases could temporarily increase.

Figures released yesterday (Tuesday) afternoon show that settled and outstanding purchases under the third covered bond purchase programme increased from Eu163.41bn to Eu165.741bn in the week to last Friday. This compares with Eu1.809bn of portfolio growth in in the previous reporting period, which was in line with the pace of purchases in previous weeks.

Six CBPP3-eligible deals settled last week, totalling Eu6.75bn, of which analysts estimated the Eurosystem bought around Eu1.4bn to Eu1.7bn.

Analysts noted that yesterday’s figure related to four business days, with no deals settling on Friday because of a public holiday.

Assuming no maturities, this implies average daily secondary market purchases of Eu158m-Eu233m, compared with an average of around Eu160m in the previous week.

Maureen Schuller, head of financials research at ING, noted that distribution statistics for CBPP3-eligible deals printed last week, which will feature in next week’s CBPP3 figure, saw lower central bank participation in the range of 22% to 24%.

However, she added that in deals settled in the week ending 25 March, i.e. that covered by yesterday’s CBPP3 figure, placement with central banks and official institutions were still in excess of 30%.

“This indicates that primary participation has not necessarily become that much lower in March, while secondary buying on a week-on-week basis in that case has,” she said.

Analysts added that the Eurosystem is on track to buy around Eu8.5bn of covered bonds in total this month – in line with the recent average – noting that it has purchased Eu7.4bn of covered bonds so far.

The public sector purchase programme (PSPP) portfolio grew Eu10.345bn to Eu643.263bn last week, compared with an increase of Eu12.406bn in the previous week.

From 1 April the monthly target of ECB’s asset purchase programme (APP) will increase from Eu60bn to Eu80bn. Some analysts said CBPP3 purchases could therefore increase slightly from the current Eu7bn-Eu8bn monthly run rate from next month, to make up for a shortfall before buying begins under a new corporate sector purchase programme (CSPP) towards the end of the second quarter, but others said the PSPP will fill the gap.