SBA Update

October 30, 2017



Activity in the SBA sector started out the week with limited trading, only to increase later in the week as new issue floating-rate SBAs came to market.  In addition, seasoned fixed-rate paper also traded well ahead of the DCPC auction later next week.  Since our last update, the SBA has announced a change to the Secondary Market Program relative to the timing of the pass through of amortization excess. Going forward SBA floating-rate prepayment speeds should moderately increase, however not all pools will be impacted equally.

 

Floating-Rate 7(a) Pools

 

Fixed-Rate (DCPC and SBIC) Pools

 

 

Government Guaranteed Loan Trading

 

Portfolio managers continue to add both floating-rate and fixed-rate SBA paper to their existing portfolios.  Recently, managers have looked to new issue floating-rate paper and seasoned DCPC.  Next week will be the November DCPC auction, which will include 10-year and 20-year maturities.

 

 


Greg Roll, CFA

Senior Vice President

Vining Sparks

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