SBA Update

December 18, 2017



Activity in the SBA sector was steady last week as the FOMC continued to tighten by raising the Fed Funds Target Rate by 25 bps.  Bank portfolio managers looking for floating-rate exposure have looked to “par” priced SBA floaters to mitigate premium exposure.  In addition, investors have added yield to their portfolios by adding DCPCs from the latest auctions.  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

 

Portfolio managers continue to focus on reviewing their SBA floating-rate holdings and adding fixed-rate government guaranteed exposure to their existing portfolios.  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.

 

 


Greg Roll, CFA

Senior Vice President

Vining Sparks

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