SBA Update

June 19, 2017

Floating-rate SBAs benefited from the Prime rate increase last week, with activity somewhat limited by supply. Fixed-rate SBA activity remained slow, with two weeks until the next DCPC auction and limited sellers in the secondary market. Strong levels of government-guaranteed loans changed hands, with supply thus far outpacing last year’s levels.

Floating-Rate 7(a) Pools

Fixed-Rate (DCPC and SBIC) Pools

Government Guaranteed Loan Trading

While supply and the calendar, SBA activity was steady last week and demand remains strong. This is especially true for floating-rate SBA pools, and although rising short-term rates favor all floating-rate products, the uncapped aspect of the SBA floaters provides a prominent advantage over many floating-rate alternatives. The prospect of further potential short-term rate increases and the already strong demand for the product suggest favorable market response to pool issuances when they recur.

James Plunkett
Director of Investment Product Strategies
Vining Sparks

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