The European Central Bank has purchased €56bn worth of covered bonds via the purchasing programme (CBPP) it announced back in May 2009. The result so far, via Deutsche Bank:
That’s spreads on peripheral Eurozone CBs back at pre-ECB buying levels.
Only spreads on Pfandbriefe – Germany’s sacred structured finance cow — and French covered bonds look significantly tighter than they were when the ECB started buying last year. Deutsche reckons that’s because the buying programme is skewed to CBs of countries with the highest ECB paid-up capital.
The ECB’s CBPP is scheduled to end on June 30 at the €60bn mark. The ECB’s other bond-buying foray, the Securities Markets Programme (SMP), meanwhile, is without a scheduled end date or allocated buying amount, though it has already hit the €47bn mark in the space of a month.
Related links:
Back to the future, by BIS - FT Alphaville
Doubts raised about ECB bond buying – FT
Covered bond bailouts – FT Alphaville
Next up for Europe, covered bond catastrophe – FT Alphaville