SBA Update

January 29, 2018



Activity in the government-guaranteed loan sector was centered on fixed-rate DCPC structures and purchases of USDA loans in the secondary market.  The limited activity in floating-rate SBAs continued to be centered on trading par handle floating-rate issues.  Four months of SBA floating-rate pre-payment activity have passed, giving the market a better understanding of the new cash flow distribution methodology and the market impacts.  Loan trading activity has increased substantially, as depository managers have been returning focus to their government guaranteed loan portfolios.

 

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 have tailed off since last year.  Loan activity has increased across all government guaranteed loan categories, as depository managers refocus their efforts on their loan portfolios.  Depositories have been very active purchasing USDA loans for their balance sheets.

 


Greg Roll, CFA

Senior Vice President

Vining Sparks

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