Monthly report on covered bond purchases – ECB

In January, the Eurosystem bought €5.5 billion ($7.6 billion) of eligible covered bonds under its covered bond purchase programme, according to a monthly report released last Thursday.

Of the total, €2.1 billion accounted for purchases in primary markets and the remaining €3.3 billion were bought off the secondary market, the European Central Bank (ECB) said. "Overall, activity in the covered bond market picked up significantly again in January, following a seasonal slowdown in December which had been widely anticipated," the central bank said.

Investor demand was strong in the primary market, the report noted, although they remained selective about issuers, preferring some to others. In the secondary market, demand was described as "moderate" by participants.

"Overall, euro area covered bond spreads have increased moderately since the beginning of the year, with national markets, where government bonds suffered the most, also underperforming," the ECB said.

The central bank expects to have purchased €60 billion-worth of covered bonds by the end of June this year.

Click here to read the report