Locke Lord QuickStudy: March 2016 Pooling Results in Lower SBIC Debenture Rate

Locke Lord LLP
March 17, 2016

The March 2016 pooling of Small Business Investment Company (SBIC) debentures was priced at 2.507%, which is near the all-time record low rate. This is reduced from the previous semi-annual pricing of 2.829% for SBIC debentures in the September 2015 pooling.   

SBICs that drew down debentures between the September 2015 and March 2016 poolings locked in this 2.507% interest rate for the ten-year term of the debentures. The pricing of SBIC debentures generally runs in tandem with the 10 year T-bill. The 10 year T-bill had a rate of 1.966% at the time of pricing, resulting in a spread of 0.541% for the SBIC debentures. 

SBIC debenture interest payments are due semi-annually. The debentures are non-amortizing, with a balloon payment of the entire principal amount of the debentures due in ten years. SBIC debentures may be prepaid without premium or penalty. 

If you have questions regarding the new debenture pricing or the SBIC program in general, please contact any of the attorneys listed on this page.