On March 22, 2012, the SBIC Funding Corporation completed pooling of SBA debentures with a historically low coupon rate of 2.766%. This is the lowest pricing of SBA-pooled debentures in more than 50 years of the SBA program.
The pricing of the pool is a critical component of the cost of funds used by SBIC Funds. Once the SBA debentures are pooled, the interest rate on them becomes fixed for 10 years. The SBIC Fund is responsible only for semiannual interest-only payments until the SBA debentures are repaid. SBA debentures must be repaid within 10 years. However, there are no prepayment penalties.
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