SBA Update

March 12, 2018



Most of the ongoing trends in the SBA sector continued into last week. Fixed-rate SBA investment activity included a well-bid DCPC auction. Floating-rate activity maintained a focus on lower-priced pools, though activity in premiums continues to improve as understanding prepayment patterns subsequent to last fall’s implementation of principal distribution timing changes improves. Meanwhile, any available fixed-rate government guaranteed loans continue to be met by enthusiastic buyers.

 

 

Floating-Rate 7(a) Pools

 

 

Fixed-Rate (DCPC and SBIC) Pools



 

Government Guaranteed Loan Trading

 


 

Demand for floating-rate pools with prices well above par increased amidst further clarification of prepayment patterns. Lower-priced pools, offered near par, remained in strong demand as the expected increase in short-term rates next week boosted their likely yields. The DCPC auction included both ten- and twenty-year maturities last week, and the pricing for both at the auctions demonstrated the strong current demand for fixed-rate SBA products.

 


James Plunkett

Director of Investment Product Strategies

Vining Sparks

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