SBA Update

May 14, 2018



A generally slow period for the SBA still featured some notable highlights. A dual DCPC auction last week resulted in the widest yield spreads for the twenty-year term since last September and the widest ten-year spreads since July. And this morning SBA 7(a) prepayments speeds closed back in on recent average levels, reversing much of last month’s increase. Otherwise, ongoing trends held, with floater buyers showing preferences for short amortization pools and also for some of the stripped down pools trading at prices close to par.

 

Floating-Rate 7(a) Pools

 

 

 

 

Fixed-Rate (DCPC and SBIC) Pools

 

 

Government Guaranteed Loan Trading

 

Activity among fixed- and floating-rate SBAs moved higher by smaller amounts than the situation would have suggested last week. Today’s favorable prepayment report for SBA floaters and revisitation to favorable buying levels suggested by the ten-year Treasury’s current proximity to a 3% yield may provide the catalysts needed to push activity closer to where it seems to belong.

 

 



James Plunkett

Director of Investment Product Strategies

Vining Sparks

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