SBA Prepay Commentary

September 2020 SBA Prepayment Speeds



September prepayments was yet another month’s contribution to a season of historically low speeds. In the past, prepayments have tended to taper off as the calendar transitions to the fall months. While a similar dip is unlikely this year given how low speeds were over the summer, it is reasonable to assume that they will remain at their current low levels in the coming months given historic trends and the current economic uncertainty. There is a chance, however, that speeds could pick up to a degree due to defaults, as there has been little talk lately about another round of Paycheck Protection Program loans after last month’s application deadline for the program.

Equipment loan pools decreased from 6.8 to 5.9 CPR, with results evenly mixed among vintages. Real-estate loan pools also dropped, going from 6.2 to 5.7 CPR, their seventh decrease in the last eight months.



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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Vining Sparks Interest Rate Products Weekly Commentary | Weekly, Monday

Investment Alternatives Matrix | Weekly, Tuesday

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





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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