Government Guaranteed Loan Offerings
Issuance of SBA par pools increased from $2 billion in 2017 to more than $4 billion in 2018. The increased supply caused the par coupon to go from Prime less 2.625% (currently 2.625%) to Prime less 2.25% (currently 3%).
Investors in SBA interest-only strips (COOFs) continued to capitalize on COOF purchases. These investors focused on the prepayment speeds of the underlying loans and were not affected by the change the SBA implemented a year ago which inflated pool prepayment speeds. COOFs had no imbedded principal to be passed through. Additionally, some COOF investors chose to employ leverage to enhance their returns. See More
We help banks, credit unions, and asset managers energize their portfolios and reduce volatility.
The Banes Capital Group (BCG) Whole Loan Trading Desk is one of the more active in the country, trading a spectrum of unsecuritized loan products from government guaranteed loans (GGL) to residential scratch and dent (SND) pools and non-performing loans (NPL). With an average of 20+ years of experience on the desk, BCG also assists its valued lenders with full balance sheet consulting, optimization, and ALM simulation, as well as advanced loan analytics and pricing. BCG and its Hanover Securities affiliate currently do business with over 650 financial institutions nationwide. Hanover Securities is one of only 14 SBA Certified Pool Assemblers in the country. We strive to be a valued resource for our bank and credit union clients who wish to optimize their performance in both government guaranteed and traditional lending, and we've put the systems in place to help our clients outperform.
Although this information has been obtained from sources we believe reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Loans and/or Securities which may be shown are subject to availability and changes in price. Past performance is not indicative of future results. Changes in any assumptions may have a material effect on projected results. This information from Banes Capital Group (BCG) and/or Hanover Securities is for your private use, and was obtained from sources we believe to be reliable. However, we do not represent that this information is accurate or complete, and it should not be relied on as such. This information is for institutional investors only, and as such certain transactions may give rise to substantial risk and are not suitable for all investors. This information was based on current market indicators which may vary over time. We may from time to time buy or sell, or have long or short positions in loans or securities identical or related to those identified herein.
The pricing of loans or any Level II or III asset is inherently an exercise in quantifying uncertain variables. As such, great care should be taken when pricing loans for reporting purposes. The information included herein should never be taken as the sole method, or even a method to be relied on, for the pricing of loans or other Level II or III assets as this is for informational purposes only.