“Investor demand has been wilting given the record €126 billion issuance over the first half of 2010.”
Investors now rush to sell covered bonds as the European Central Bank prepares to pull the plug on program, according to Structured Finance News.com.
Covered bond issuance has been strong over the past five trading days on the back of banks looking to take advantage of the final days of the European Central Bank’s (ECB) purchase program.
The program ends in the middle of this week.
Sales totaled 169 billion euros in the last six months compared with €233.4 billion in 2009, Bloomberg data showed.
Societe Generale analysts said that investor demand has been wilting given the record €126bn issuance over the first half of 2010.
It’s likely that as a result issuance activity will slow down, as the markets are traditionally closed from mid-July to end-August.
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