- Targets include Spanish, Portuguese mortgage-backed securities
- Central bank's ABS purchases have trailed other assets
The European Central Bank is seeking to purchase as much as 1.3 billion euros ($1.4 billion) of asset-backed securities by the end of the week to inject new life into a debt-buying program, according to people familiar with the matter.
The central bank is offering to buy 529 million euros of Dutch mortgage bonds held by investors on Wednesday, according to the people, who asked not to be identified because they’re not authorized to talk about the plan. It will seek as much as 533 million euros of Spanish securitizations on Thursday and up to 207 million euros of Portuguese bonds on Friday, the people said.
This week’s targets are equal to about 9 percent of the ECB’s existing holdings of securitized debt, and they mark an effort to step up a purchase program that has been dwarfed by other stimulus efforts and left the market underwhelmed. Investors have also largely rebuffed the ECB since it started making offers to buy ABS from them in June.
An ECB spokesman declined to comment on the ABS purchase program. The central bank plans to boost asset purchases in the run-up to an almost-two-week pause over the December holiday period.
Wednesday’s ABS targets comprise 11 Dutch residential mortgage-backed securities, including notes secured by loans originated by a unit of ING Groep NV, according to a document obtained by Bloomberg. Noteholders are requested to submit offers by 2 p.m. London time.
On Thursday, the ECB will seek offers to sell 15 Spanish notes, including debt backed by Bankinter SA home loans, according to a separate document. The next day, it will pursue offers on seven Portuguese securitizations.
The ECB has bought 15 billion euros of asset-backed notes since it started purchases a year ago. That makes ABS the smallest part of the 582 billion euros spent so far under the ECB’s asset-buying program. The central bank can buy asset-backed bonds from dealers and acquire newly issued deals in addition to purchases from investors.