SBA Update

February 5, 2018



Activity in the SBA and related markets continues to be squarely centered on fixed-rate DCPC structures and purchases of USDA loans on the secondary market.  Although floating-rate SBAs continue to trade, the majority activity is in par handle floating-rate issues.  Four months of SBA floating-rate prepayment activity have passed, giving the market a better understanding of the new cash flow distribution methodology and the market impacts.

 

Floating-Rate 7(a) Pools

 

Fixed-Rate (DCPC and SBIC) Pools

 

 

Government Guaranteed Loan Trading

 

Demand for fixed-rate SBA securities continues to be healthy, although fixed-rate loan originations that back DCPC debentures has tailed off since last year.  Strong demand should continue if supply is limited due to lower fixed-rate origination activity.  In addition to DCPCs, depositories have been very active purchasing USDA loans for their balance sheets.


Greg Roll, CFA

Senior Vice President

Vining Sparks

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