The European Central Bank is seeking tenders from financial firms to provide it with calculations on the likelihood of losses on asset-backed securities and covered bonds as it prepares to purchase the debt.
The central bank is also looking for data on market prices and assistance with modeling cash flows, according to a notice on the ECB’s website.
The three contracts are slated to start in November and last four years, the document shows.
The ECB is preparing to buy a broad portfolio of ABS and covered bonds and will disclose details after policy makers meet today in Naples.
By seeking expert advice, the central bank will get data that will enable it to decide which securities to buy and how to manage them, according to Banco Bilbao Vizcaya Argentaria SA analyst Aaron Baker.
“With these three contracts the ECB will gain information that can help inform the scope of its purchase programme,” said Mr Baker, who analyses the covered bond and ABS markets.
“Requesting the ability to structure hypothetical cash flows suggests it could be looking at purchasing retained deals, while the information could also be useful as it seeks support from governments for guaranteeing certain ABS.”
While ECB president Mario Draghi has signaled a willingness to grow the ECB's balance sheet by as much €1 trillion, investors have expressed scepticism that he will find sufficient assets to buy because the outstanding amount of public debt has shrunk to €244 billion.
The €635 billion of notes created and retained by banks as collateral for central bank funding could create a separate supply of ABS, and Mr Draghi signaled last month the securities could be included in its programme.
Bloomberg
