SBA Update

April 16, 2018



The SBA sector enjoyed greater than normal investor attention last week. Availability of fixed-rate SBA products from recent auctions and obvious relative value positioning of both SBIC and DCPC offerings resulted in greater than usual trading volumes, while expectations of further short-term rate moves and the overall flattening of yield curves continued to offer compelling reasons to buy floating-rate bonds, including SBA 7(a) pools.

 

Floating-Rate 7(a) Pools

 

 

 

Fixed-Rate (DCPC and SBIC) Pools

 

Government Guaranteed Loan Trading

 

Strong weekly volume for the SBA sector reflected favorable relative value positioning for fixed-rate products in terms of both spread and structure. SBA floaters continued to enjoy the enhanced attention resulting from the upward path of short-term rates. Volume should remain strong this week, though last week’s pace will be hard to repeat.

 



James Plunkett

Director of Investment Product Strategies

Vining Sparks

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