In the largest pooling in the history of the SBIC Program, on March 15,
2011, the SBIC Funding Corporation completed pricing on $822,000,000 in
pooling of SBA debentures with a coupon rate of 4.084%. This is one of the
lowest pricings on SBA-pooled debentures in more than 50 years of the
program, and follows the September 2010 issuance at 3.215%.
The pricing of the pool is a critical component to the cost of funds used
by SBIC Funds. Once pooled, the interest rate on the SBA debentures becomes
fixed for a 10-year period. The SBIC Fund is only responsible for a
semi-annual interest-only payment on the SBA debentures until the SBA
debentures are repaid. The SBA debentures must be repaid within 10 years. In
addition, there are no pre-payment penalties.
The March 2011 pool was the largest pooling in the history of the
program, and included issuances to 60 SBIC Funds located in the United
States. Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, and
Goldman, Sachs & Co. served as the underwriters.
The historical pooling information is reflected in our chart (click to view).
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