The CBPP3 portfolio grew only Eu102m last week, but analysts attributed the low figure to quarter end amortisation adjustments, a lack of issuance, and a shortened, four day trading week, noting that the fall in the pace of secondary market purchases was not as substantial as it appears.

Figures released yesterday (Monday) afternoon show that settled and outstanding purchases under the third covered bond purchase programme increased from Eu165.741bn to Eu165.843bn in the week to last Friday. This compares with Eu2.331bn of portfolio growth in the previous reporting period.

Analysts said the low figure was partly explained by a quarter-end amortisation adjustment of Eu503m.

At the end of each quarter, the ECB makes amortisation adjustments to the CBPP3 portfolio, which, it says, emerges from an accounting principle that implies that securities purchases at prices below face value have to be revalued upwards over time towards maturity, and revalued downwards over time if purchased at prices above face value.

Taking the amortisation into account, analysts said the actual increase was Eu605m.

Yesterday’s figure also related to four business days. With issuance also having been limited, only one CBPP3-eligible deal settled last week, a Eu500m issue for Van Lanschot, of which analysts estimated that the Eurosystem bought around Eu188m.

Assuming no maturities, this implies average daily secondary market purchases of around Eu105m, down from what analysts estimated to be Eu158m-Eu233m in the previous reporting period.

“If we strip out all of the one-off elements, things look actually quite different, with the CBPP3 only moderately slowing down its secondary buying during the Easter holiday week – the headline number of Eu102m suggests a complete standstill – and the PSPP actually increasing its activity in the four days,” said Florian Eichert, head of covered bond and SSA research at Crédit Agricole.

The public sector purchase programme (PSPP) portfolio grew Eu8.759bn to Eu652.022bn last week, compared with an increase of Eu10.345bn in the previous week. However, analysts noted that when a quarter-end amortisation adjustment of Eu2.656bn is taken into account, last week’s figure surpasses that of the previous reporting period.

Month-end figures also released by the ECB yesterday show that the CBPP3 portfolio grew Eu7.318bn in March, and that as at 31 March 29.55% of the portfolio had been purchased on the primary market and 70.45% on the secondary.

Starting this month, the monthly target of ECB’s asset purchase programme (APP) has increased from Eu60bn to Eu80bn, and some analysts said CBPP3 purchases could therefore increase slightly to make up for a shortfall before buying begins under a new corporate sector purchase programme (CSPP) towards the end of the second quarter.