(Bloomberg) -- The European Central Bank is taking stock of its corporate bond purchases almost two years since they were added to its quantitative-easing program.
Since June 2016, the ECB has accumulated 17 percent of all company debt eligible for the program, or around 150 billion euros ($179 billion), according to an article from its Economic Bulletin published Tuesday.
With the economy now on the mend and monthly purchases well below earlier levels -- though not, ECB President Mario Draghi said last month, being secretly tapered -- the institution is asking how much of a difference it made.
Tighter Spreads
The ECB’s analysis shows the program lowered corporate bond spreads by an average of 25 basis points for all eligible bonds between March 2016, when the program was announced, and the end of last year. Corporate issuers that didn’t fit the ECB’s criteria also benefited: their spreads fell by 20 basis points. The overall financing conditions for companies improved.
More and Longer Bonds
Non-financial companies -- especially in France and the Netherlands -- boosted their net bond issuance. The average maturity of their newly issued debt also increased, by 5 months, to an average of 9.3 years. The euro became more popular as a currency of choice for companies looking for new financing, with its share of total issuance rising to the highest levels since early 2015.
More Loans
The program probably spurred banks to boost lending to companies that couldn’t count on the ECB’s largess. The report points to a rising share of small and medium-sized companies -- particularly in France -- that said banks were more willing to extend credit.
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