SBA Update

May 20, 2019

SBA prepayment speeds for SBA 7(a) pools were mixed in May compared to the prior month.  The overall trend since peaking last November has been a slowdown in CPRs for both Equipment and Real-Estate pools.

Floating-Rate 7(a) Pools

May SBA Prepayment Speeds

Fixed-Rate DCPC Pools

Fixed-rate SBA DCPC pools and SBIC debentures remain attractive as they offer superior convexity profiles to most residential MBS alternatives.  Portfolio managers are considering strategies to extend duration and call structures to protect against falling rates.

Government Guaranteed Loan Trading

Government-guaranteed USDA agricultural FSA loans traded to financial institutions last week, but limited availability of supply has impacted activity recently.  As has been the case for some time, supply and not demand limits loan trading volumes.

Dan Stimpson, CPA

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

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