SBA Update

December 17, 2018

Investors remain active in floating-rate SBA pools as yields on these pools should move higher if the Fed raises rates as expected this week, which should continue to drive demand in floating-rate SBAs.  Prepayment speeds for SBA 7(a) pools declined in December compared to the previous month and printed slower speeds than their respective 12-month moving averages.


December SBA Prepayment Speeds

Equipment and Real-Estate SBA 7(a) pools posted 24% and 25% declines, respectively, in their 1mo CPRs measured month-over-month.  Every vintage of consequence for equipment pools posted a month-over-month decline, save the 2017 issue pools, which increased 12%.  Real-Estate speeds by vintage were more uniform. Every vintage of consequence posted a month-over-month decline.

Floating-Rate 7(a) Pools

Fixed-Rate DCPC Pools

Government Guaranteed Loan Trading

Government-guaranteed USDA agricultural loans and SBA loans actively traded to financial institutions last week.  As has been the case for some time, supply and not demand limits loan trading volumes.

Dan Stimpson, CPA

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

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