By Francesco Canepa

FRANKFURT (Reuters) - One in five company bonds bought by the European Central Bank since June yielded less than zero, the ECB said on Wednesday, raising questions about whether the bank risks fuelling a market bubble and will need to slow the pace of its purchases.

The ECB has bought 13.2 billion euros ($14.8 billion) worth of corporate debt since it added credit to its shopping list in June, with the aim of lowering borrowing costs for companies to stimulate hiring and investment.

Yields on the bonds it bought ranged from a negative 0.3 percent to more than 3 percent, with just over 20 percent of the total yielding less than zero, the ECB said in its economic bulletin on Wednesday, publishing details of its purchases for the first time.

Negative-yielding debt bought by the ECB typically includes paper maturing over the next four years and issued by highly-rated or state-backed companies such as Swiss food group Nestle <NESN.S> or French power supplier Engie <ENGIE.PA>.

The drop in yields since the program was announced in March indicated that the ECB had succeeded in lowering interest rates, at least for the large firms that finance themselves on the market.

But it also raised concerns that heavy buying by the central bank was pushing down yields too far, where they may soon no longer reflect the risk of a default by the issuer, weakening market discipline on borrowers and eventually contributing to a bubble.

Around a dozen bonds bought by the ECB, including some paper issued by state-owned German rail operator Deutsche Bahn, already yield less than the so-called risk-free rate, a market benchmark used to gauge the reward investors earn for taking on credit risk, according to UniCredit estimates.

"My expectations is the ECB will slow down its purchases because, if it maintained its current volume, then it would need to buy spreads down into negative territory for many companies for which a negative spread would make no sense," said Philip Gisdakis, an analyst at UniCredit.

The ratings of the bonds bought in the credit program ranged from AA to BBB- and their distribution reflected that of the universe of eligible debt, the ECB said in the bulletin.

Producers of consumer goods such as Unilever <ULVR.L> <UNc.AS> accounted for 28 percent of the bonds bought by the ECB, making it the most represented sector in the scheme, followed by utilities, it added.

The majority of purchases were worth less than 10 million euros each, with trades completed directly with issuers typically larger than those carried out on the market.

(Editing by Kevin Liffey)