In a short note released this morning, Standard & Poor's analysts said that benchmark European covered bond issuance was €12.5 billion in May, up from €6.6 billion in April.

However, the rating analysts said this dropped from €29.2 billion last May. The December 2011 and February 2012 three-year European Central Bank lending operations have limited European bank funding needs. This has placed downward pressure on covered bond volumes, S&P analysts believe.

Worldwide covered bond issuance last month was $14 billion, which decreased from $36 billion in May 2011.

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