TLTRO Repayments Coming Friday, But How Much?

The first set early ECB TLTRO repayments are due Friday. Counterparties required to tell their respective national central banks Wednesday if they want to avail themselves of early repayment, while we get the results of the operation on Friday (1205CET), with settlement on Nov 23. A full forward calendar of repayment dates is available here.

• Recall that at the October ECB meeting, TLTRO terms were changed retroactively "for monetary policy reasons" (in Lagarde's words), with interest paid on the loans to be indexed to average key ECB rates from Nov 23 onward - hence 3 additional voluntary early repayment dates so banks can exit the loans if they choose.
• We will assemble a list of sell-side expectations for TLTRO repayments later this week. Those we have seen vary widely on the takeup: most we have read suggest a range of E500-800bln in total repayments by end-2022 (vs E2.1trn outstanding, of which E1.3trn is due by June 2023).
• Some see this week's operation making up the bulk of that amount (eg E500-600+bln), with risks to the downside, while others think the December repayment in a few weeks' time will be bigger, as banks take more time to assess regulatory and liquidity considerations.