The ECB announced a Eu3.126bn increase in settled CBPP3 purchases yesterday (Monday), with a rise in secondary buying helping keep the programme ticking over as primary activity slows into year-end. A first breakdown into primary and secondary buying was also released.

The European Central Bank reported the Eu3.126bn increase to its third covered bond purchase programme in a seventh weekly update yesterday afternoon, taking the total to Eu20.927bn. It follows a Eu5.078bn rise the previous week, which is the biggest increase of any week and which took the total to Eu17.801bn.

Analysts noted that purchases under CBPP3 are now almost three times the amount bought over a similar period in CBPP1 and seven times that of CBPP2.

This week’s figure of Eu3.126bn almost matches the average weekly amount to date, taking into account six weeks and three days, which stands at Eu3.171bn.

The weekly totals, released each Monday, include only purchases settled up to the previous Friday. This means the weekly updates do not necessarily reflect the ECB’s activity in the markets over the previous five days.

Only two CBPP3-eligible issues settled in the period covered by Monday’s update – a Sparkasse Hannover Eu250m 10 year issue and a WL Bank Eu500m five year. The central bank and official institutions share of the WL Bank benchmark was 64%, although Asian distribution, which often includes such accounts, was 4%, and Barclays analysts estimated that CBPP3’s share of the deal was around Eu300m, or 60%. Official statistics were not available for Sparkasse Hannover’s distribution, although a syndicate official at one of the leads told The Covered Bond Report that CBPP3 did not support the deal. This implies that the majority of last week’s total was made up of secondary buying.

“The increase in the CBPP3 portfolio was slightly above our expectations,” Barclays’ analysts said of Monday’s figures.

Subtracting the Eu300m of estimated WL Bank buying from the week’s Eu3.126bn total implies Eu2.826bn of secondary purchases. This is higher than estimates that secondary purchases contributed around Eu2bn to last week’s figure, suggesting that the pace of secondary buying has risen.

The ECB has also published a breakdown of cumulative purchases under CBPP3, revealing that to the end of November Eu13.488bn (75.77%) had been bought on the secondary market, with Eu4.313bn (24.23%) in primary. The figures also confirmed that of Eu4.779bn of purchases that settled in the first eight days of CBPP3 activity, at the end of October, none were primary market-related.

As no previous breakdown had been given for CBPP3, some analysts had estimated the respective market shares, basing these, as above, on an aggregate of central bank and official institutions distribution of individual deals. For example, Crédit Agricole analysts had estimated that as of the end of November Eu4.186bn of CBPP3 purchases had been in the primary market, Eu127m less than the official ECB figure, although another analyst overestimated it by some Eu700m.

Only one CBPP3-eligible transaction settles this week and would hence contribute to next Monday’s figure, a Eu1bn long seven year Cariparma deal, of which the Eurosystem took 35%, or Eu350m, according to the leads. Analysts therefore expect next Monday’s update to show a further decrease in CBPP3’s pace, at a time when many investors are closing their books for the year, making secondary purchases less likely.

Meanwhile, the ECB yesterday announced an increase of Eu233m to Eu601m for its asset-backed securities purchase programme (ABSPP), which it is running alongside CBPP3. Yesterday’s figure is the second, after a first Eu368m total announced on Monday of last week.

An analyst noted that this means the Eurosystem sourced more CBPP3 volume on an average day last week than ABSPP has over its duration so far, reflecting a lack of ECB-eligible deals and a smaller secondary market.