SBA Update

October 29, 2018

Investors were active last week in floating-rate SBA pools as yields on these pools should move higher if the Fed raises rates later this year.  The market is currently pricing in around a 75% chance of another 25bps hike by the Fed at their meeting in December, which should continue to drive demand in floating-rate SBAs.  Fixed-rate DCPC pools and SBIC fixed-rate debentures remain attractive as well, as they offer superior convexity profiles to most residential MBS alternatives, while offering comparable yields and spreads.


Floating-Rate 7(a) Pools

Fixed-Rate DCPC Pools

Government Guaranteed Loan Trading

Government-guaranteed USDA agricultural loans and SBA loans actively traded to financial institutions last week.  As has been the case for some time, supply and not demand limits loan trading volumes.


Dan Stimpson, CPA

Senior Vice President

Vining Sparks

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