"A whopping 15 issuers have already launched new Jumbo covered bonds, and still the pipeline has not emptied," said the report, by analysts Ted Packmohr and Annegret Hasler. January is traditionally one of the strongest issuance months and usually accounts for about 15% of annual volume so that expectations for the full year are around €150 billion to €170 billion.

Because the European Central Bank support program is scheduled to run out in June, front-loading of issuance activity was expected, and the high primary market volume is a natural result of issuers competing for an attractive market window. As of 12 January, EU central banks acting within the ECB purchase program had bought €29.5 billion of volume, around 5% lower than the pro-rata portion of the planned overall €60 billion purchase. Despite this, demand seems to show first signs of fatigue, with order books no longer filling up as swiftly.

Plans by international supervisory authorities to oblige banks to maintain liquidity buffers and strengthen their resilience to crises may however support demand, since covered bonds are likely be classed among assets counting toward liquidity ratios. The Committee of European Banking Supervisors has included covered bond/Pfandbrief alongside government bonds as candidates for such holdings, and in mid-December the Basel Committee on Banking Supervision followed this example. "In principle, we find such approaches very positive for our product as they are likely to prompt banks to increase their covered bond holdings," the Commerzbank analysts said.