On September 16, 2014, the SBIC Funding Corporation completed a pooling of
SBA debentures in the amount of $1,007,590,000. The SBA debentures have a coupon
rate of 3.015%. This most recent pricing reflects a decrease from the March 2014
rate of 3.191% and the September 2013 rate of 3.644% and continues the trend of
historically low rates.
The pricing of the pool is a critical component to the cost of funding used
by SBIC Funds. Once pooled, the interest rate on the SBA debentures becomes
fixed for a 10-year period. The SBIC Fund is responsible only for a semiannual
interest payment on the SBA debentures until the SBA debentures are repaid,
which must occur within 10 years. In addition, there are no prepayment
The historical pooling is reflected in our chart.
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The private equity practice group at McGuireWoods is dedicated to keeping
clients advised of new legislative and business developments as they occur. If
you have any questions regarding these issues, please feel free to contact Mark
A. Kromkowski (312.849.8170), your primary attorney at McGuireWoods, or any of