ECB Said to Seek 645 Million Euros of Dutch, Irish Mortgage Debt

  • Investors asked to submit offers to sell RMBS to ECB
  • Central bank stepping up efforts to buy ABS to spur lending

The European Central Bank is seeking to acquire as much as 645 million euros ($725 million) of Dutch and Irish mortgage bonds as it increases efforts to buy asset-backed securities, according to three people familiar with the matter.

The central bank is asking investors to sell their holdings in 15 residential mortgage-backed securities, including bonds backed by loans originated by units of Dutch insurer Aegon NV and Irish lender Permanent TSB Group Holdings Plc, said the people, who asked not to be identified because they’re not authorized to talk about it. Noteholders are requested to submit offers by 2 p.m. London time on Thursday, according to an offers-wanted-in-competition, or OWIC, document obtained by Bloomberg.

The Frankfurt-based central bank is seeking to inject new energy into its purchase program for asset-backed debt after facing criticism from investors and traders disappointed by its reach. Since June, the central bank has widened its scope to target investor holdings rather than just buying notes directly from banks, people familiar with the matter said last week.

An ECB spokesman declined to comment on the ABS purchase program.

The ECB has acquired 11.1 billion euros of asset-backed debt under a purchase program it started in November, equal to just 10 percent of its purchases of covered bonds under a similar program. The volume of its ABS acquisitions has been hindered by an approval process that takes as long as five days.