SBA Prepay Commentary

April 2020 SBA Prepayment Speeds



April 2020


Last month, we anticipated many businesses would elect to keep excess liquidity in reserves due to concern about the coronavirus’s economic impact. While a slowdown was to be expected, we certainly did not anticipate one to this type of extent. The effects of nationwide social distancing measures were reflected in prepayments, as speeds on both Equipment and Real-Estate loan pools experienced widespread decreases for the month of April.

Equipment loan pools dropped from 17.0 to 12.0 CPR, with every vintage experiencing a decrease as well. Real-Estate loan pools went down from 18.4 to 13.4, as all but two individual vintages experienced reductions in speeds.


Looking forward is always tough, and even more so now. I always find it helpful to focus on what we do know.



Equipment Loan Pool CPRs



Real-Estate Loan Pool CPRs



SBA Prepayment Tables (PDF)

Prepared according to methodologies described by SIFMA.



Strategic Insights, Upcoming Webinars, and Other Helpful Links

Webinar | Tuesday (4/21): Banks: Balance Sheet Management in the Current Markets (2 CPE)

Webinar | Thursday (4/23): Credit Unions: Balance Sheet Management in the Current Markets (1 CPE)

Weekly Sector Update | Weekly, Monday

Market Today | Daily

Weekly Recap | Weekly, Friday

Brokered Deposit Rate Indications | Weekly, Monday

Investment Alternatives Matrix | Weekly, Tuesday

MBS Prepay Commentary (April) | Monthly, 5th business day

Strategic Insight: Fed Announces $2.3 Trillion of Additional Support to the Economy

Strategic Insight: Potential for Selling Held-to-Maturity Securities for Liquidity Purposes

Strategic Insight: Defending Your Bottom Line – Phase II: Wholesale Borrowings and Leverage





Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

KSmith@viningsparks.com


Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

AHofer@viningsparks.com


INTENDED FOR INSTITUTIONAL INVESTORS ONLY.
The information included herein has been obtained from sources deemed reliable, but it is not in any way guaranteed, and it, together with any opinions expressed, is subject to change at any time. Any and all details offered in this publication are preliminary and are therefore subject to change at any time. This has been prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual or institution. This information is, by its very nature, incomplete and specifically lacks information critical to making final investment decisions. Investors should seek financial advice as to the appropriateness of investing in any securities or investment strategies mentioned or recommended. The accuracy of the financial projections is dependent on the occurrence of future events which cannot be assured; therefore, the actual results achieved during the projection period may vary from the projections. The firm may have positions, long or short, in any or all securities mentioned. Member FINRA/SIPC.
Copyright © 2021
Member FINRA/SIPC
This is a publication of Vining-Sparks IBG, L.P.
775 Ridge Lake Blvd., Memphis, TN 38120