September 2022 SBIC Leverage Pricing Determined
SBIC pool size sees strong debenture pricing of $1,276,565,000
September 14, 2022 (Washington, D.C.) – The Small Business Investor Alliance (SBIA), the leading association for lower middle market private equity funds and investors, today announced that $1,276,565,000 of Small Business Investment Companies (SBIC) debentures were priced at an interest rate of 4.262%. The size of the SBIC debenture pool that priced today was the third largest in history. The largest pooling to date occurred in March 2022 at $2,077,850,000.
This rate of 4.262% is the new base rate applied to the SBIC leverage drawn between the last pooling in March 2022 and September 6, 2022. This base rate does not include any of the other fees charged by the SBA, such as the annual charge, reserving, or drawing fees. SBIC debentures are non-amortizing, fixed rate notes with no prepayment penalty. The SBIC leverage operates with a zero subsidy rate, as any costs are offset by fees. The previous pool of debentures priced in March 2022 at 2.938%. The higher rate of this pool is largely a function of a significantly higher 10-Year Treasury rate.
“SBICs continue to provide vital, long-term capital to diverse domestic small businesses,” said SBIA President Brett Palmer. “Demand for this capital remains strong as the SBIC program continues to grow and help America’s small businesses drive our economy.”
About the Small Business Investor Alliance (SBIA)
The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for over 60 years. For more information, visit www.SBIA.org or call (202) 628-5055.
About Small Business Investment Companies
Small Business Investment Companies are highly regulated, venture capital and private equity funds that invest exclusively in domestic small businesses to help them grow and create American jobs. SBICs pursue investments in a broad range of industries, geographic areas, and stages of investment. Since its inception, the Small Business Investment Company program has facilitated access to patient capital for tens of thousands of small businesses and has created millions of American jobs. The SBIC program is one of the best examples of a public-private partnership, matching federal funding with experienced private investors to support domestic small business growth at zero risk to the American taxpayer.