FRANKFURT (MNI) – The following is the verbatim text published by
the European Central Bank, announcing details of its new covered bond
purchase program:

Further to its decision of 6 October 2011 to launch a new covered
bond purchase programme (CBPP2), the Governing Council of the European
Central Bank (ECB) decided today upon the technical modalities of the
programme:

– The purchases of euro-denominated covered bonds issued in the euro
area, for an intended nominal amount of EUR 40 billion, will be
distributed across the euro area and will be carried out by the
Eurosystem by means of direct purchases.

– The purchases will be conducted in both the primary and the secondary
markets.

– In order to be qualified for purchase under the programme, covered
bonds must:

– be eligible for use as collateral in Eurosystem credit operations;

– comply with the criteria set out in Article 52(4) of the
Directive on undertakings for collective investment in
transferable securities (UCITS) or similar safeguards for non-
UCITS-compliant covered bonds, as specified in Section 6.2.3 of
the General Documentation;

– have an issue volume of EUR 300 million or more;

– have a minimum rating of BBB- or equivalent from at least one of
the major rating agencies;

– have a maximum residual maturity of 10.5 years; and

– have underlying assets that include exposure to private and/or
public entities.

– The counterparties qualified to participate in the CBPP2 are those
counterparties that are eligible for the Eurosystems monetary policy
operations, together with any other counterparties that are used by
the Eurosystem for the investment of its euro-denominated portfolios.

– The purchases will start in the course of November 2011 and are
expected to be fully implemented by the end of October 2012 at the
latest.

Furthermore, the Governing Council has decided to make its CBPP2
portfolio available for lending. This decision will be implemented by
the Eurosystem. Lending will be voluntary and conducted through security
lending facilities offered by central securities depositories, or via
matched repo transactions with eligible counterparties.

[TOPICS: MT$$$$,M$$CR$,M$X$$$,M$$EC$]