SBA Prepay Commentary

May 2020 SBA Prepayment Speeds



May 2020


After three straight months of declining prepayments for both loan pool types, Equipment pools increased slightly for the month of May while Real-Estate pool speeds continued to decrease as expected. This past month also saw a second round of funding for Paycheck Protection Program (PPP) loans to the tune of $310 billion. As of May 14th, 2.7 million businesses have been approved for these loans with an average loan size of $71,254. As the effects of the COVID-19 pandemic carries on, it is fair to assume many businesses will continue withholding from making loan prepayments for the sake of maintaining available liquidity. Pairing this hesitancy with the cushion PPP can provide against defaults, one would expect to continue to see low speeds such as these in the coming months.

Equipment loan pools increased from 12.0 to 12.4 CPR, with results mixed among individual vintages. Real-Estate loan pools decreased yet again, going from 13.4 to 12.5, though results were also mixed on a vintage-by-vintage basis.



Equipment Loan Pool CPRs



Real-Estate Loan Pool CPRs



SBA Prepayment Tables (PDF)

Prepared according to methodologies described by SIFMA.



Strategic Insights and Other Helpful Links

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 (May) | Monthly, 5th business day

Strategic Insight: Viewing Municipal Finances through the Lens of a Pandemic

Strategic Insight: Mortgage Rates and Prepayment Speeds





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


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