Prepay Commentary

May SBA Prepayment Speeds

May 14, 2018


SBA prepayments for floating-rate pools reversed course again, decreasing slightly from April while remaining slightly above the average CPR for the last six months. Equipment-loan pools decreased almost 0.8 CPR, while real-estate-backed pools slowed 1 CPR. Six-month moving average CPRs for the population barely budged, holding around 15.1-15.25 CPR. Eight consecutive months of prepay history have passed since the cashflow methodology change by the SBA, and absent month to month changes resulting from technical factors, CPRs for SBA 7(a) pools have remained relatively steady and stable, behaving consistently enough to confirm the applicability of vectors built on the historical data for analyzing pools. The higher overall WAC for SBA floaters reflects most pools’ coupon adjustments to the most recent increase in Prime, though there is a very small population of 7(a) pools indexed to LIBOR.




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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