ECB puts Pepp into step of covered bonds as primary tipped to resume

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By Bill Thornhill
26 Mar 2020

Hesitant covered bond issuers, that had been waiting for the European Central Bank to commence buying under its Pandemic Emergency Purchase Programme (Pepp), may no longer have an excuse to wait and should return to the market soon — particularly since funding levels are cheap relative to senior unsecured, but also because wider spreads may reflect the deterioration in credit risk as opposed to liquidity risk.

The European Central Bank was seen buying covered bonds on Thursday amid news that that it had begun to execute transactions under its Pepp

Investors have switched out of older deals into much cheaper recently issued bonds leading the Street long of trading inventory. But this stock of ...

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