The ECB made an aggressive start to its corporate sector purchases last week, according to analysts, while secondary buying of covered bonds may have fallen, although some cautioned against drawing firm conclusions given the short sample period and potential high redemptions in the CBPP3 portfolio.

Buying under the Eurosystem’s new corporate sector purchase programme (CSPP), which had been awaited since its announcement by the ECB in March, began last Wednesday.

European Central Bank figures released yesterday (Monday) afternoon show that the Eurosystem purchased Eu348m of corporate bonds on Wednesday, with purchases made later in the week settling too late to be included in Monday’s figure.

Analysts cautioned against drawing conclusions from only one day of purchases, but said the number represented an impressive start.

“While it is difficult to extrapolate too much from only one day of purchases – the ECB might not buy as much every day – this is probably more than most thought and confirms that it was an aggressive start of the programme,” said Quentin Gilletta, credit strategist at ING.

They also noted that this figure related only to secondary market settlements, as no eligible bonds were sold on Wednesday.

“Based on around 21 trading days per month, the extrapolated volume per month already amounts to Eu7.3bn,” said analysts at LBBW. “This figure is even likely to rise slightly, as the ECB tends to approach the programme slightly more cautiously and we expect to also see primary market activity in the future.”

Analysts had previously estimated that CSPP purchases will average between Eu5bn and Eu10bn per month.

Separate figures released by the ECB yesterday show a net increase in settled and outstanding purchases under CBPP3 in the week to last Friday of Eu1.491bn, up from Eu178.359bn to Eu179.85bn. In the previous reporting period, the portfolio grew Eu973m.

Eu3.5bn of CBPP3-eligible issuance settled last week, of which analysts estimated the Eurosystem bought Eu800m-Eu950m – compared with around Eu110m of primary settlements in the previous reporting period, when only Eu500m of eligible issuance settled.

Assuming no redemptions, this implies average daily secondary market purchases last week of around Eu110m-Eu140m, compared to an average of Eu170m per day in the previous reporting period. (Redemption figures for the purchase programme portfolios are released weekly, usually on Tuesday afternoons, and given to one decimal point.)

Maureen Schuller, head of financials research at ING, said the figures show that the ECB’s secondary presence in corporate credit “seems to be stronger” than in covered bonds.

Some market participants have suggested that the addition of CSPP to the APP means that CBPP3 buying could be reduced in the coming months, from its recent run rate of around Eu7bn per month.

According to Florian Eichert, head of covered bond and SSA research at Crédit Agricole, however, some Eu8.8bn of CBPP3-eligible issuance matured last week. Eichert said this could have resulted in substantial redemptions in the portfolio.

“We therefore don’t read too much into today’s net secondary settlements, which have dropped substantially compared to last Monday’s number,” he said. “The ECB will very likely have been a good bit more active than what it seems based on today’s data release despite the active primary markets.”