SBA Update

December 11, 2017



Activity in the SBA sector focused squarely on fixed-rate products with the December DCPC auction being met with strong demand.  Bank portfolio managers looking for floating-rate exposure have looked to the interest rate swap market to create a “do-it-yourself” SBA floater that offers comparable yields and limited premium risk.  Loan activity continues to be strong in both 7(a) floating-rate loans and fixed-rate USDA government guaranteed loans, however activity is expected to lessen as year-end approaches.

 

Floating-Rate 7(a) Pools

 

Fixed-Rate (DCPC and SBIC) Pools



Government Guaranteed Loan Trading

 


Paper from the latest DCPC auction was picked up by investors looking for fixed-rate exposure in their portfolios.  Portfolio managers continue to focus on reviewing their SBA floating-rate holdings and adding fixed-rate government guaranteed exposure to their existing portfolios.  Bank portfolio managers looking for floating-rate exposure have looked to the interest rate swap market to create a “do-it-yourself” SBA floater that offers comparable yields and limited premium risk.  Please contact your sales representative to inquire about interest rate swap strategies.

 


Greg Roll, CFA

Senior Vice President

Vining Sparks

INTENDED FOR INSTITUTIONAL INVESTORS ONLY.
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.
Copyright © 2021
Member FINRA/SIPC
This is a publication of Vining-Sparks IBG, L.P.
775 Ridge Lake Blvd., Memphis, TN 38120