SBA Update

September 17, 2018



SBA activity was focused on the semi-annual SBIC auction last Thursday, which priced at wider spreads than the previous auctions over the last two years.  Activity in the SBA sector improved last week compared to the last month including strong activity in a variety of product offerings in addition to strong investor demand resulting from the SBIC auction.

Fixed-Rate SBIC Debentures




Fixed-Rate DCPC Pools



Floating-Rate 7(a) 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.


Prepay Commentary

Prepayment speeds for equipment loan pools reverted back towards their averages since a year ago, accelerating slightly overall versus a below average August. Real estate pool speeds continued to creep higher, though weak issuance of pools continues to pressure speeds upward as the existing loan population gravitates toward a higher weighted average loan age. Prepayment speeds remain consistent with patterns observed over the last twelve months, with loan age dominating other factors in importance and also with a consistent shape to seasoning vectors for equipment loan and real estate pools. Faster speeds for the 2015 and 2016 vintages can be attributed to their seasoning as the loan populations move toward the elevated portions of seasoning ramps.




 



Dan Stimpson, CPA

Senior Vice President

Vining Sparks

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