SBA Prepay Commentary
December SBA Prepayment Speeds
December prepayment speeds were a mixed bag for Equipment and Real-Estate SBA 7(a) pools. Equipment loan pools were essentially unchanged, going from 16.1 to 16.2 CPR. When observed on a vintage-by-vintage basis, the more notable speed variations occurred in older pools. Real-Estate loan pools decreased from November’s 21.1 to 18.0 CPR. Most individual vintages saw their speeds decline, but with varying steepness.
Equipment Loan Pool CPRs
- The lack of change in overall speeds was heavily driven by newer/larger vintages.
- After mixed results last month, most vintages have gone back to experiencing speeds above both their 6- and 12-month averages, with exception to 2014, 2015, and 2016 pools.
- One of the speed changes of note is those of the 2017 vintage, which went from 16.9 to 19.3 CPR. Its current balance and the amount of loans remaining are fairly large due to the pools’ young age, but its prepayment speeds more closely resemble those of older vintages.
Real-Estate Loan Pool CPRs
- Speeds across vintages generally decreased, with exception to 2006, 2007, 2017, and 2019 pools.
- Most vintages reversed their increase/decrease direction from last month.
- 2009 and 2014 had the largest changes, going from 23.1 to 7.4 CPR and 35.4 to 21.4 CPR, respectively.
Prepared according to methodologies described by SIFMA.
Kevin A. Smith, CFA
SVP, Director Investment Product Strategies
Analyst, Investment Product Strategies