In March 2015, the SBIC Funding Corporation completed a pooling of SBA
debentures in the amount of $1.16 billion, the largest pooling in the program’s
56-year history. The SBA debentures have a coupon rate of 2.517%. This most
recent pricing reflects a decrease from the September 2014 rate of 3.015% 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.
Click to view full size.
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