Prepay Commentary

June SBA Prepayment Speeds



June 14, 2018

 

The day after the Federal Reserve raised the Fed Funds Target Rate 25bps SBA 7(a) pool factors showed that prepayments increased as well. Both equipment-loan and real-estate pool CPRs rose, more than erasing last month’s decline. While day count by itself should have pushed speeds higher, seasonal factors and cyclical influences doubtless influenced last month’s prepayment activity. Speeds increased across almost all vintages for both real-estate and equipment-loan pools. The highest CPR posted since the SBA changed its cashflow methodology last October provides further confirmation that higher CPRs post October are not just a one-time event that will gradually slow back to pre-cashflow methodology change CPRs.  June has one less business day and one more accrual day than May and, with the reversal of calendar influences, should provide better insight into the nature of cyclical trends.

 

 

 

SBA Prepayment Tables (Click for Details)

Prepared according to methodologies described by SIFMA.

 







 

Strategic Insight: Four Months In, SBA Prepayments

 



James Plunkett

Director of Investment Product Strategies

Vining Sparks


Amanda Noa

Vining Sparks


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