Change to SBA Secondary Market Program, 62363 [2020-21832]
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Federal Register / Vol. 85, No. 192 / Friday, October 2, 2020 / Notices
revolving fund. SBA has determined
that the lower fees are reasonable to
maintain sufficient funds in the
revolving fund to cover the cost of
anticipated losses in the SBG program.
Although the report on the evaluation
study found that the lower fees did not
increase the number or values of bonds
during the fee evaluation period, the
lower fees charged to the Principal and
Surety will reduce the cost of bonding
to small businesses, and result in a
projected average annual cost savings of
$3.5 million for Principals and Sureties.
In addition, the evaluation report
indicated that ‘‘higher volume surety
producers were more likely to respond
more positively or optimistically to the
potential benefits of continuing or
increasing the [fee] reductions.’’
In light of the above, SBA has decided
to adopt the lower fees of 20% of the
bond premium for the Surety fee and $6
per thousand dollars of the contract
amount for the Principal fee, and will
continue to apply these lower fees to all
SBA surety bond guarantees approved
on or after October 1, 2020. SBA will
actively monitor the performance of the
SBG program to ensure that the fees are
reasonable and necessary and allow
SBA to administer the SBG program on
a prudent and economically justifiable
basis.
Authority: 15 U.S.C. 694b(h); 13 CFR
115.32(b) and (c) and 115.66.
Dated: September 29, 2020.
William Manger,
Associate Administrator/Chief of Staff, Office
of Capital Access.
[FR Doc. 2020–21876 Filed 9–29–20; 4:15 pm]
BILLING CODE 8026–03–P
SMALL BUSINESS ADMINISTRATION
Change to SBA Secondary Market
Program
Small Business Administration.
Notice of change to secondary
market program.
AGENCY:
ACTION:
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
decreasing the minimum maturity ratio
for both SBA Standard Pools and
Weighted-Average Coupon (WAC) Pools
by 500 basis points, to 89.0%. 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
jbell on DSKJLSW7X2PROD with NOTICES
SUMMARY:
VerDate Sep<11>2014
19:38 Oct 01, 2020
Jkt 253001
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, 2020.
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, 2020, SBA Pool
Assemblers may increase the difference
between the shortest and the longest
remaining term of the guaranteed
portions of loans in a Pool by 5
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
62363
percentage points (i.e., decreasing the
minimum maturity ratio by 500 basis
points). SBA does not expect a 5
percentage point reduction in the
minimum maturity ratio to have an
adverse impact on either the program or
the participants in the program.
Therefore, effective October 1, 2020, 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 89.0%. 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, 2020.
Dated: September 29, 2020.
William M. Manger,
Associate Administrator, Office of Capital
Access.
[FR Doc. 2020–21832 Filed 10–1–20; 8:45 am]
BILLING CODE P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
Public Notice for Waiver of
Aeronautical Land Use Assurance;
Nampa Municipal Airport, Nampa,
Idaho
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Notice.
AGENCY:
Notice is being given that the
FAA is considering a request from the
Nampa Municipal Airport, Airport
Superintendent to change certain
portions of the airport from aeronautical
use to non-aeronautical use at the
Nampa Municipal Airport, Nampa, ID.
The request consists of 6 parcels, or
portions thereof that are depicted on the
Airport’s current Exhibit A—Airport
Property Map.
SUMMARY:
E:\FR\FM\02OCN1.SGM
02OCN1
]]>Agencies
[Federal Register Volume 85, Number 192 (Friday, October 2, 2020)]
[Notices]
[Page 62363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21832]
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
Change to SBA Secondary Market Program
AGENCY: 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 decreasing the minimum maturity
ratio for both SBA Standard Pools and Weighted-Average Coupon (WAC)
Pools by 500 basis points, to 89.0%. 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, 2020.
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, [email protected].
FOR FURTHER INFORMATION CONTACT: John M. Wade, Chief, Secondary Market
Division at 202-205-3647 or [email protected].
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, 2020,
SBA Pool Assemblers may increase the difference between the shortest
and the longest remaining term of the guaranteed portions of loans in a
Pool by 5 percentage points (i.e., decreasing the minimum maturity
ratio by 500 basis points). SBA does not expect a 5 percentage point
reduction in the minimum maturity ratio to have an adverse impact on
either the program or the participants in the program. Therefore,
effective October 1, 2020, 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
89.0%. 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,
2020.
Dated: September 29, 2020.
William M. Manger,
Associate Administrator, Office of Capital Access.
[FR Doc. 2020-21832 Filed 10-1-20; 8:45 am]
BILLING CODE P
