Change to SBA Secondary Market Program

CourtSmall Business Administration
Citation86 FR 49087
Record Number2021-18858
Publication Date01 Sep 2021
49087
Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Notices
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[FR Doc. 2021–18901 Filed 8–31–21; 8:45 am]
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
Change to SBA Secondary Market
Program
AGENCY
: U.S. Small Business
Administration.
ACTION
: Notice of change to secondary
market program.
SUMMARY
: The purpose of this Notice is
to inform the public that the Small
Business Administration (SBA) is
making a change to its Secondary
Market Loan Pooling Program. SBA is
increasing the minimum maturity ratio
for both SBA Standard Pools and
Weighted-Average Coupon (WAC) Pools
by 400 basis points, to 93.0%. The
change described in this Notice is being
made to cover the estimated cost of the
timely payment guaranty for newly
formed SBA 7(a) loan pools. This
change will be incorporated, as needed,
into the SBA Secondary Market Program
Guide and all other appropriate SBA
Secondary Market documents.
DATES
: This change will apply to SBA
7(a) loan pools with an issue date on or
after October 1, 2021.
ADDRESSES
: Address comments
concerning this Notice to John M. Wade,
Chief Secondary Market Division, U.S.
Small Business Administration, 409 3rd
Street SW, Washington, DC 20416; or
john.wade@sba.gov.
FOR FURTHER INFORMATION CONTACT
: John
M. Wade, Chief, Secondary Market
Division at 202–205–3647; or
john.wade@sba.gov.
SUPPLEMENTARY INFORMATION
: The
Secondary Market Improvements Act of
1984, 15 U.S.C. 634(f) through (h),
authorized SBA to guarantee the timely
payment of principal and interest on
Pool Certificates. A Pool Certificate
represents a fractional undivided
interest in a ‘‘Pool,’’ which is an
aggregation of SBA guaranteed portions
of loans made by SBA Lenders under
section 7(a) of the Small Business Act,
15 U.S.C. 636(a). In order to support the
timely payment guaranty requirement,
SBA established the Master Reserve
Fund (MRF), which serves as a
mechanism to cover the cost of SBA’s
timely payment guaranty. Borrower
payments on the guaranteed portions of
pooled loans, as well as SBA guaranty
payments on defaulted pooled loans, are
deposited into the MRF. Funds are held
in the MRF until distributions are made
to investors (Registered Holders) of Pool
Certificates. The interest earned on the
borrower payments and the SBA
guaranty payments deposited into the
MRF supports the timely payments
made to Registered Holders.
From time to time, SBA provides
guidance to SBA Pool Assemblers on
the required loan and pool
characteristics necessary to form a Pool.
These characteristics include, among
other things, the minimum number of
guaranteed portions of loans required to
form a Pool, the allowable difference
between the highest and lowest gross
and net note rates of the guaranteed
portions of loans in a Pool, and the
minimum maturity ratio of the
guaranteed portions of loans in a Pool.
The minimum maturity ratio is equal to
the ratio of the shortest and the longest
remaining term to maturity of the
guaranteed portions of loans in a Pool.
Based on SBA’s expectations as to the
performance of future Pools, SBA has
determined that for pools formed on or
after October 1, 2021, SBA Pool
Assemblers may decrease the difference
between the shortest and the longest
remaining term of the guaranteed
portions of loans in a Pool by 4
percentage points (i.e., increasing the
minimum maturity ratio by 400 basis
points). SBA does not expect a 4
percentage point increase in the
minimum maturity ratio to have an
adverse impact on either the program or
the participants in the program.
Therefore, effective October 1, 2021, all
guaranteed portions of loans in
Standard Pools and WAC Pools
presented for settlement with SBA’s
Fiscal Transfer Agent will be required to
have a minimum maturity ratio of at
least 93.0%. SBA is making this change
pursuant to Section 5(g)(2) of the Small
Business Act, 15 U.S.C. 634(g)(2).
SBA will continue to monitor loan
and pool characteristics and will
provide notification of additional
changes as necessary. It is important to
note that there is no change to SBA’s
obligation to honor its guaranty of the
amounts owed to Registered Holders of
Pool Certificates and that such guaranty
continues to be backed by the full faith
and credit of the United States.
This program change will be
incorporated as necessary into SBA’s
Secondary Market Guide and all other
appropriate SBA Secondary Market
documents. As indicated above, this
change will be effective for Standard
Pools and WAC Pools with an issue date
on or after October 1, 2021.
John M. Wade,
Chief, Secondary Market Division, Office of
Capital Access.
[FR Doc. 2021–18858 Filed 8–31–21; 8:45 am]
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
SBIC Licensing and Examination Fees
Inflation Adjustment
AGENCY
: U.S. Small Business
Administration.
ACTION
: Notice of SBIC fee increases.
SUMMARY
: The U.S. Small Business
Administration (SBA) is providing
notice of the increased licensing and
examination fees charged to Small
Business Investment Companies (SBICs)
due to the annual inflation adjustment
required under SBIC program
regulations.
DATES
: The changes to the SBIC program
licensing and examination fees
identified in this notice take effect on
October 1, 2021.
FOR FURTHER INFORMATION CONTACT
:
Steve Knott, Office of Investment and
Innovation, at 202–205–7731 or
steve.knott@sba.gov.
SUPPLEMENTARY INFORMATION
: Beginning
October 1, 2021, the SBIC program
regulations at 13 CFR 107.300(b)(2) and
107.692(b)(2) require SBA to annually
adjust the licensing and examination
fees for SBICs using the Inflation
Adjustment defined in 13 CFR 107.50.
This document provides notice of that
adjustment. The table below identifies
the amounts of the adjusted licensing
and examination fees payable by SBICs
and SBIC license applicants, which
become effective on October 1, 2021.
SBIC fee type Fees amounts
(effective
Oct. 1, 2021)
Licensing Fees (§ 107.300)
Initial Licensing Fee
§ 107.300(a) ...................... $10,500
Final Licensing Fee
§ 107.300(b) ...................... 36,900
Examination Fees (§ 107.692(b))
Minimum Base Fee .............. 9,500
Maximum Base Fee for non-
Leveraged SBICs .............. 31,600
Maximum Base Fee for Le-
veraged SBICs .................. 46,400
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