SBA Prepay Commentary

December 2020 SBA Prepayment Speeds

After a fall season of counter-trend prepayment increases, both pool types saw a slight dip in their December speeds. This decline may be due to a combination of typical seasonality for prepayments as well as November having fewer business days. We would expect for speeds to remain low next month due to their historical performance in winter months before they begin to pick up in the spring/summer as the growing availability of the COVID-19 vaccine should increase business confidence.

Equipment loan pools’ prepayments decreased from 12.7 to 11.9 CPR, with results mixed among vintages. Real-estate loan pools also slightly decreased, dropping from 11.5 to 11.0 CPR, their ninth decrease in the last twelve months.

Equipment Loan Pool CPRs

Changes in prepayments across vintages were mixed.
The largest decrease was seen by the 2014 vintage, which dropped from 24.6 to 11.7 CPR. The largest increase was seen by the 2019 vintage, which rose from 6.9 to 10.0 CPR.
Results are mixed on a vintage-by-vintage basis when compared to their respective 6- and 12-month averages.

¹Equipment loan pools have original WAMs between 8 and 13 years

Real-Estate Loan Pool CPRs

Speeds for real-estate loan pools reversed course after two straight months of increases, which is the ninth decrease in the last twelve months.
Most individual vintages experienced a decrease in speeds, though several vintages did see a pickup.
The largest decrease was experienced by the 2007 vintage, which declined from 16.8 to 9.2 CPR. The largest increase was experienced by the 2014 vintage, which rose from 13.0 to 17.0 CPR.
All vintages are above their 6-month averages, but the results are mixed when comparing to their 12-month averages.

²Real-estate loan pools have original WAMs greater than 18 years

SBA Prepay Commentary

December 2020 SBA Prepayment Speeds

SBA Prepayment Tables (PDF)

Prepared according to methodologies described by SIFMA.

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