(Bloomberg) --
The European Central Bank doled out 851 million euros ($931 million) to euro-area banks in the first round of a new liquidity program launched last month, according to a statement.
The allotments with a 16-month maturity were made on Wednesday under the ECB's so-called “pandemic emergency longer-term refinancing operations” plan, or PELTRO. The facility mainly targets smaller banks and those who aren't eligible for a separate program with targeted lending criteria.
PELTRO loans are subject to an interest rate 25 basis points below the ECB's main refinancing rate, which is currently at zero. That means banks taking them can make a profit. The program was launched last month amid a rapidly deteriorating outlook for the euro-area economy.
Read more: ECB's Stealth Rate Cut Lures Banks to Fund Virus-Hit Economy
A separate program known as targeted longer-term refinancing operations offers banks even more generous terms in return for providing credit to the real economy, though the next allotment under that facility doesn't take place until June. The relatively low takeup of PELTROs suggests banks are waiting for those loans to become available, according to Danske Bank chief strategist Piet Christiansen.
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