by Bob Judge
Editor, Coleman & GLS CPR Report
In January, SBA 7(a) prepays rose back above 8% as we enter 2015.
As to the cause, we witnessed a double-digit increase in voluntary prepayments, reaching
a six-year high.
Defaults rose by 7%, but remained below 2% for the 17th month in a row. Historically,
this reading was the fourth lowest since 1999.
Returning to voluntary prepayments, they rose back above 7%, increasing by 41% from
As for the detail, overall prepayments rose by 35% to 8.85% from 6.56% in December.
In comparing prepayment speeds for January 2015 to January 2014, we see that 2015
came in 9.33% higher, CPR 8.85% versus CPR 8.09%.
As for the largest sector of the market, 20+ years to maturity prepayment speeds rose by 42%
to 8.88% from 6.27%.
Turning to the CPR breakdown, the default CPR increased by 7% to 1.28% while the voluntary prepayment CPR rose by 41% to 7.57%.
Preliminary data for next month suggests that prepayments will return to sub-7% territory as we move further into the 1st quarter of 2015.
Regarding our maturity buckets, prepayment speeds rose in five out of six categories.
Increases were seen, by order of magnitude, in the 16-20 year sector (+252% to CPR 9.13%),
8-10 (+48% to 10.13%), 20+ (+42% to CPR 8.88%), 13-16 (+13% to CPR 14.31%) and 10-
13 (+12% to CPR 7.76%).
The lone decrease was seen in <8 (-22% to CPR 12.90%). While we begin 2015 with a relatively high CPR, expect a few sub-7% prints over the next few months, bringing the YTD numbers back below 8%. The full article can be found here