ECB Assets Rise Above 36% Of Eurozone GDP; Draghi Now Owns 10.2% Of European Corporate Bonds

Tyler Durden's picture

The ECB's nationalization of the European corporate bond sector continues. In the ECB's latest update, the six central banks acting on behalf of the Euro system provided an update on the list of corporate bonds they bought. They bought into 810 issuances with a total of €573bn in amount outstanding. For the week ending 27th January, the bond purchases stood at €1.9bn across sectors. This increases the number of securities held by the ECB to 813, and lift the ECB's total corporate bond holdings to €58.82b, which means that as of the latest weekly data, the ECB now owns 10.2% of the total €575.42BN in European corporate debt outstanding.

Since one month ago, the ECB owned 9.2% of the corporate bond market, the rate of nationalization of the private, outstanding corporate bonds is roughly 1% per month. Tangentially, 52 or 6.4% of the 813 securities held by the ECB are negative yielding.

Which corporate bonds did Mario Draghi generously subsidize this week? According to the ECB's holdings, utilities remain the largest industry group with 215 securities, while according to Bloomberg, in the latest week  the ECB bought bonds issued by Atlantia, BASF, Carmila, Enel, Fresenius, Italgas, LEG Immobilien, Linde, Legrand, RTE, Snam and Telefonica Emisiones. The complete list of ECB holdings by ISINs can be found here.

While there was some market concern in December that the ECB may be tapering its CSPP program, when it purchased just €4 billion in corporate bonds in the month, less than half the recent runrate from the September-November period, this appears to have been calendar driven, as in January the ECB is back to its aggressively purchases and through the last week, it purchased €7.8 billion in corporate bonds for January, nearly a 100% increase from the prior month.

Corporate purchases began on June 8, 2016, with the weekly average of ~€1.7bn per week and total corporate bond holdings of €58.8bn (as of 27-Jan-17), or roughly €6.8bn a month. ECB purchased bonds have gained 0.60% in Dec vs -1.25% in Nov. The bonds purchased under CSPP have marginally outperformed the broad index that gained 0.57% in December. Last week, total EUR issuances worth €21.2bn were issued in the primary market, of which ~ €5.2bn were CSPP eligible. For the month ending December, total CSPP holdings stood at €51.1bn, with 86% of the purchased amount coming from the secondary market.

A breakdown of which countries' bonds the ECB bought into:

Looking at the break up country wise, French and German issuers continue to dominate the ISIN count (417 issuances worth €309bn in amount outstanding). Bonds from non- Eurozone corporates were also on the list, with the bulk from Switzerland (25 issuances worth €18bn). When looking at the purchases by sector, Utilities remains at the top (215 issuances worth €143bn), while non-cyclical consumer is a distant second (118 issuances, €91bn in amount outstanding).

Mostly belly of the curve, not averse to negative yields

In terms of duration, while the ECB has bought across the curve, it has avoided going very long (12+yr). Bulk of the purchases has occurred in 3-7yrs region (349 issuances worth €242bn). By rating, it's clear that the ECB hasn't been reluctant from taking credit risk as they have bought into overall 185 BB rated and non-rated bonds. By yield, the ECB has already bought into 96 negative yielding bonds (€75bn, average yield of - 0.09%). By issuer, the ECB has bought into 810 bonds from 233 issuing entities. The bond with the longest maturity that was purchased was the 20 year EDF 1.875% 13/10/36 from the Electricite De France.

Finally, stepping back from just the CSPP program, as of the latest week, total purchases under the ECB's various asset purchase programmes rose to €1,610 billion...

... bring the ECB's balance sheet to over €3.72 trillion, or over 36% of the total Eurozone GDP.

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ParkAveFlasher's picture

Administrative no-value-add layers, ftw.  Here I was thinking that the ECB was supposed streamline the flow of capital, not be a net resistor.

mtl4's picture

So...........running out of reasons not to normalize rates now aren't we?!

knukles's picture

Filling me with optimism and shedding tears of joy!
MOAR!
Bitchez!

Haus-Targaryen's picture

This is a German/Dutch/Danish/Swedish speaking Tyler that wrote this article.

Good read. Thanks.

froze25's picture

Just some more of that Babylonian money magic at work... Don't worry it will end well...

TruthHunter's picture

"Joos"?

Draghi is ANOTHER Jesuit educated world leader. Maybe you should ask who owns the "Joos".

Nearly 2000 years ago, they swore their allegiance to Rome("we have no king but Caesar") Is it possible G-d holds them to it? 

 

The central planners's picture

Nothing better that to put bad money after the worst money.

halcyon's picture

Yes, yes, by more. Need to support for my bond hedge.

Thank you Super Mario!

LOL, this is indeed a farce. At least I'm profiting from obvious stupidity of non-elected officials.

 

Anasteus's picture

All that is just a scam. In real case when the eurozone gets broken, ECB will disappear without legitimate descendant, and so will its claims. They'll all become null and void.

By the way, this is similar to what the world finance reset would look like.

Wulfkind's picture

Any bets on how long it will be before Draghi owns 50% ?

100% ?

peddling-fiction's picture

Once lending interest skyrockets, they will own just about everything.

Wulfkind's picture

Tru dat.   Which is why it's QEternity, NIRP and bail ins, especially for those countries that are initiating a cashless society.

Ghordius's picture

"Here I was thinking that the ECB was supposed streamline the flow of capital, not be a net resistor."

nope. that was never the scope. try... currency wars

PrivetHedge's picture

The simple mathematics of central banks renting us their currency: One day, all the wealth gets owned by them.

ejmoosa's picture

That would depend on what those that are selling to Draghi are doing once they are getting their payments, wouldn't it?

CompassionateConservative's picture

He(brews) will not divide us!

carbonmutant's picture

"Whatever it takes..." lol

BritBob's picture

The UK has opted for a hard Brexit especially when one country (or part of a country in Belgium) can stall negotiations for so long. Spain could act in a similar fashion over Gibraltar and has the cheek to maintain its Gibraltar sovereignty claim. Claim?

Gibraltar - Some Relevant International Law: https://www.academia.edu/10575180/Gibraltar_-_Some_Relevant_Internationa...

So it looks like a quick hasta luego !

 

Winston Churchill's picture

As a fellow Brit(born and raised there) PLEASE SHUT UP ABOUT GIBRALTAR AND THE FALKLANDS.

Neither are going anywhere.Both are strategic choke points.

Bill of Rights's picture

Assets ha ha ha ha ha more like shit no one wants.

yogibear's picture

Draghi can own all of it.
Kill the system in a slow manner.

slammin_dude's picture

ECB and "elites" sure dont learn history eh? "Ownership" doesn't count for much when the mob has wiped out your entire family and busy raping your corpse in the streets....

Fuck soros, fuck gate, and fuck buffet and that little shit Suckberg

wcvarones's picture

Yellen is a punk.  She has only printed & bought 24% of GDP

Wulfkind's picture

Mr Yellen:   "Hold my beer.....I'VE GOT THIS !!

Fundies's picture

You lucky lucky bastard.

mynamewaslost's picture

The Kindness of Strangers, just published by the Centre for Policy Studies on this subject.  http://www.cps.org.uk/publications/reports/the-kindness-of-strangers/

SmittyinLA's picture

Draghi is a beard for the fed, we own Draghi and his debts and mouth

falak pema's picture

ECB's fuel is the German SURPLUS trade balance; FED defuel is the US DEFICIT trade balance, in a currency war that has as third unknown  : the Chinese red cock dragon that cannot afford to lose control of its TRILEMMA, aka currency rate, capital outflow and interest rate !

And dat means it will defy the US in the currency war as well...if the USD goes downhill.

The Ides of March!

falak pema's picture

The US Greenback God's rise to Supremo under the Duck's Doctrine of make America great, as SOLE guarantor of NWO financial hegemony, has raised the head of Eurogroup's equally toxic debt leveraged Euro, now vying to save the EU by calling the Duck's monetary bluff.

We are in the Casino of debt gone viral under the ECB gun, in the proxy war of monetary constructs.

Las Vegas poker game here we come!

Who will win te pot of EU/USA head to head of CBs fighting for their economies based on bluff vs bluff.

The Players are now without collateral; its a naked bluff; the stuff of legends.

Identity Crisis now has another face of the monetary crisis, as the West goes head to head with its own twin brother.

Gog meets Magog !

TeethVillage88s's picture

So what is the End Game HERE?

"ECB Assets Rise Above 36% Of Eurozone GDP; Draghi Now Owns 10.2% Of European Corporate Bonds"

- Communism
- Fascism
- Globalism
- a new kind of Ideology or Government, EU Empire without Military Might

JTimchenko's picture

If there was ever a time to own gold, it is now, with the crazy stuff the ECB is doing, and the resulting imminent collapse of the Euro. A lot of folks seem to be catching on, especially the well connected banksters with inside information. With physical demand up by 729%, there isn't much time left to buy gold at a reasonable price. Read this:

http://averybgoodman.com/myblog/2017/01/29/comex-physical-gold-deliverie...

Ghordius's picture

3.7 vs 4.x. someone is ahead, still

Ignorance is bliss's picture

Draghi to the European people. You can't leave the Eurozone we own your corporations, we own your nations, and by extension we own you.

MikeOz's picture

DRAIN THE CORRUPT BANKSTERS SWAMP!!!!

supermaxedout's picture

Where is the problem? The ECB is owned by the member countries of Euroland. The only alternative to the ECB are the big Rothschild banks which do own the FED. 

JailBanksters's picture

if 10% is good, the why not own 50% of all Bonds, that should be even betterer.

Just create a fresh batch of digital money and go shopping, how hard can it be.