SBIC Program Remains Steady; Debenture Rate Decreases to 2.078 Percent

March 19, 2020

On March 16, 2020, the Small Business Investor Alliance announced that $1,007,335,000 of Small Business Investment Companies (SBIC) debentures were priced at an interest rate of 2.078 percent.

This is the second-lowest interest rate of SBIC debentures ever, reflecting a 133.5 basis point (bps) spread from the 10-year Treasury rate and a 130 bps spread from the 10-year mid-swaps rate. This is the new base rate applied to any SBIC leverage drawn since the last pooling in September 2019. The rate does not include the annual, reserving or drawing fees, nor does it include additional fees that the Small Business Administration charges SBICs. SBIC debentures are non-amortizing, fixed-rate notes. The previous pool of debentures priced in September 2019 at 2.283 percent and in March 2019 at 3.113 percent.

The historical pooling is reflected in our chart.

SBIC Debentures Charts

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 contact Mark A. Kromkowski (+1 312 849 8170), Bryan P. Bylica (+1 312 750 3617), your primary attorney at McGuireWoods or any of the other authors.

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