SBA Prepay Commentary

November 2020 SBA Prepayment Speeds

SBA prepayment speeds have continued to counter their seasonal trends, as November brought yet another increase that was widely experienced among vintages for both pool types. In fact, another increase of this size next month would put both pool types directly in line with their speeds from last December. This winter could continue to see an increase in prepayments as optimism is beginning to grow for small businesses with the announcement of two potential COVID-19 vaccines, one from Pfizer and BioNTech and another from Moderna, becoming available in the coming months.

Equipment loan pools’ prepayments increased from 8.5 to 12.7 CPR, with most individual vintages also seeing an increase in speeds. Real-estate loan pools also rose, going from 6.7 to 11.5 CPR, their second-straight increase after declining for eight of the first nine months this year.

Equipment Loan Pool CPRs

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

Real-Estate Loan Pool CPRs

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

SBA Prepayment Tables (PDF)

Prepared according to methodologies described by SIFMA.

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

WSJ: Pfizer’s Covid-19 Vaccine Proves 90% Effective in Latest Trials

“The timetable suggests the vaccine could go into distribution this month or next, though U.S. health regulators have indicated they will take some time to conduct their review. Then it will take months for the companies to make enough doses for the general population.”

WSJ: Moderna’s Covid-19 Vaccine Is 94.5% Effective in Early Results, Firm Says

“If regulators do authorize the vaccine, the initial supply of doses will be limited—20 million, or enough for 10 million people, by the end of the year, Moderna forecasts. The federal government may decide to vaccinate health-care workers and first responders first, followed by other segments of the population in phases until more doses are made next year.”

Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

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.
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