82_FR_48342 82 FR 48144 - Changes to SBA Secondary Market Program

82 FR 48144 - Changes to SBA Secondary Market Program

SMALL BUSINESS ADMINISTRATION

Federal Register Volume 82, Issue 198 (October 16, 2017)

Page Range48144-48144
FR Document2017-22466

The purpose of this Notice is to provide the public with notification of a procedural change in SBA's Secondary Market Pooling program. This change involves the pass through of principal payments to Registered Holders of Pool Certificates resulting from Pool loan prepayments.

Federal Register, Volume 82 Issue 198 (Monday, October 16, 2017) 
[Federal Register Volume 82, Number 198 (Monday, October 16, 2017)]
[Notices]
[Page 48144]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-22466]


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SMALL BUSINESS ADMINISTRATION


Changes to SBA Secondary Market Program

AGENCY: U.S. Small Business Administration (``SBA'').

ACTION: Notice.

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SUMMARY: The purpose of this Notice is to provide the public with 
notification of a procedural change in SBA's Secondary Market Pooling 
program. This change involves the pass through of principal payments to 
Registered Holders of Pool Certificates resulting from Pool loan 
prepayments.

DATES: The change referenced in this Notice affects all outstanding 
Pools issued between October 1, 2004, and on or about September 1, 
2017. The change will be incorporated into payments made to Registered 
Holders of Pool Certificates before the end of the calendar year.

FOR FURTHER INFORMATION CONTACT: John M. Wade, Chief, Secondary Market 
Division, U.S. Small Business Administration, 409 3rd Street SW., 
Washington, DC 20416, or [email protected].

SUPPLEMENTARY INFORMATION: The Secondary Market Improvements Act of 
1984 authorized SBA to guaranty 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 on Pool Certificates.
    Pool payments to Registered Holders of Pool Certificates are made 
monthly and consist of scheduled payments of pool principal and 
interest. The payments may also include a return of pool principal from 
full or partial prepayments of pool loans prior to the Pool maturity 
date. Principal from these prepayments are passed through to Registered 
Holders of Pool Certificates, but the amounts may vary based on 
amortization excess associated with the prepaid loan.
    Amortization excess represents that portion of the outstanding 
principal balance of a Pool allocated to a particular pool loan 
compared to the actual loan principal balance outstanding at the time 
the loan is prepaid. Amortization excess may include differences 
attributed to principal prepayments on a pool loan that is less than or 
equal to 20% of the outstanding principal balance. Borrower payments of 
loan principal made up to the date of prepayment are based on the 
amortization schedule of the borrower's Note, but paid to Registered 
Holders of Pool Certificates based on the amortization schedule of the 
Pool. This variance comes from differences in interest rates and 
maturity dates of the pool loan compared with the Pool Certificate.
    On September 21, 2004, SBA issued Notice of a Change in the SBA 
Secondary Market Program (and referenced herein as the ``2004 
Notice''). 69 FR 56472. This 2004 Notice described program changes made 
to all Pools formed on or after October 1, 2004 including the 
disposition of amortization excess. Prior to October 1, 2004, SBA 
spread the amortization excess from prepaid loans over the remaining 
life of the Pool. In the 2004 Notice, SBA revised the program to pass 
through amortization excess once a pool loan is prepaid. In certain 
circumstances, however, amortization excess resulted in a reduction in 
the amount of a principal passed through to Registered Holders of Pool 
Certificates, with the retained principal remaining in the MRF to be 
paid out through scheduled principal payments until the Pool matures, 
or as all pool loans are fully paid.
    In order to improve the efficiency of the program, SBA is 
implementing a procedural change that will adjust the timing of certain 
principal distributions from the MRF. For Pools formed between October 
1, 2004 and on or about September 1, 2017 with pool loans remaining, 
SBA will reallocate the outstanding Pool balances pro rata across the 
remaining pool loan principal within a Pool. When a pool loan 
subsequently prepays in full, payments to Registered Holders of Pool 
Certificates may include retained principal in addition to the 
scheduled payments of pool principal, interest and related prepayments. 
This change will be incorporated, as needed, into the SBA Secondary 
Market Program Guide, and all other appropriate SBA Secondary Market 
materials.
    It is important to note that there is no change to SBA's obligation 
to honor its guaranty of the amount 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.

    Authority: 15 U.S.C. 634(g)(2).

William M. Manger,
Associate Administrator, Office of Capital Access.
[FR Doc. 2017-22466 Filed 10-13-17; 8:45 am]
 BILLING CODE 8025-01-P

48144 Federal Register / Vol. 82, No. 198 / Monday, October 16, 2017 / Notices For the Commission, by the Division of Registered Holders of Pool Certificates, and all other appropriate SBA Trading and Markets, pursuant to delegated but the amounts may vary based on Secondary Market materials. authority.27 amortization excess associated with the It is important to note that there is no Eduardo A. Aleman, prepaid loan. change to SBA’s obligation to honor its Assistant Secretary. Amortization excess represents that guaranty of the amount owed to [FR Doc. 2017–22264 Filed 10–13–17; 8:45 am] portion of the outstanding principal Registered Holders of Pool Certificates BILLING CODE 8011–01–P balance of a Pool allocated to a and that such guaranty continues to be particular pool loan compared to the backed by the full faith and credit of the actual loan principal balance United States. SMALL BUSINESS ADMINISTRATION outstanding at the time the loan is Authority: 15 U.S.C. 634(g)(2). prepaid. Amortization excess may Changes to SBA Secondary Market William M. Manger, include differences attributed to Program principal prepayments on a pool loan Associate Administrator, Office of Capital Access. that is less than or equal to 20% of the AGENCY: U.S. Small Business [FR Doc. 2017–22466 Filed 10–13–17; 8:45 am] outstanding principal balance. Borrower Administration (‘‘SBA’’). BILLING CODE 8025–01–P payments of loan principal made up to ACTION: Notice. the date of prepayment are based on the SUMMARY: The purpose of this Notice is amortization schedule of the borrower’s SMALL BUSINESS ADMINISTRATION to provide the public with notification Note, but paid to Registered Holders of of a procedural change in SBA’s Pool Certificates based on the [Disaster Declaration #15342 and #15343; amortization schedule of the Pool. This US VIRGIN ISLANDS Disaster Number VI– Secondary Market Pooling program. 00012] This change involves the pass through variance comes from differences in of principal payments to Registered interest rates and maturity dates of the Presidential Declaration of a Major Holders of Pool Certificates resulting pool loan compared with the Pool Disaster for Public Assistance Only for from Pool loan prepayments. Certificate. the U.S. Virgin Islands On September 21, 2004, SBA issued DATES: The change referenced in this AGENCY: U.S. Small Business Notice of a Change in the SBA Notice affects all outstanding Pools Administration. Secondary Market Program (and issued between October 1, 2004, and on referenced herein as the ‘‘2004 Notice’’). ACTION: Notice. or about September 1, 2017. The change 69 FR 56472. This 2004 Notice will be incorporated into payments SUMMARY: This is a Notice of the described program changes made to all made to Registered Holders of Pool Presidential declaration of a major Pools formed on or after October 1, 2004 Certificates before the end of the disaster for Public Assistance Only for including the disposition of calendar year. the US Virgin Islands (FEMA–4340– amortization excess. Prior to October 1, FOR FURTHER INFORMATION CONTACT: John 2004, SBA spread the amortization DR), dated 10/05/2017. M. Wade, Chief, Secondary Market excess from prepaid loans over the Incident: Hurricane Maria. Division, U.S. Small Business Incident Period: 09/16/2017 and remaining life of the Pool. In the 2004 Administration, 409 3rd Street SW., continuing. Notice, SBA revised the program to pass Washington, DC 20416, or john.wade@ through amortization excess once a pool DATES: Issued on 10/05/2017. sba.gov. loan is prepaid. In certain Physical Loan Application Deadline SUPPLEMENTARY INFORMATION: The circumstances, however, amortization Date: 12/04/2017. excess resulted in a reduction in the Economic Injury (EIDL) Loan Secondary Market Improvements Act of amount of a principal passed through to Application Deadline Date: 07/05/2018. 1984 authorized SBA to guaranty the timely payment of principal and interest Registered Holders of Pool Certificates, ADDRESSES: Submit completed loan on Pool Certificates. A Pool Certificate with the retained principal remaining in applications to: U.S. Small Business represents a fractional undivided the MRF to be paid out through Administration, Processing and interest in a ‘‘Pool,’’ which is an scheduled principal payments until the Disbursement Center, 14925 Kingsport aggregation of SBA guaranteed portions Pool matures, or as all pool loans are Road, Fort Worth, TX 76155. of loans made by SBA Lenders under fully paid. FOR FURTHER INFORMATION CONTACT: section 7(a) of the Small Business Act, In order to improve the efficiency of A. Escobar, Office of Disaster 15 U.S.C. 636(a). In order to support the the program, SBA is implementing a Assistance, U.S. Small Business timely payment guaranty requirement, procedural change that will adjust the Administration, 409 3rd Street SW., SBA established the Master Reserve timing of certain principal distributions Suite 6050, Washington, DC 20416, Fund (‘‘MRF’’), which serves as a from the MRF. For Pools formed (202) 205–6734. mechanism to cover the cost of SBA’s between October 1, 2004 and on or SUPPLEMENTARY INFORMATION: Notice is timely payment guaranty on Pool about September 1, 2017 with pool hereby given that as a result of the Certificates. loans remaining, SBA will reallocate the President’s major disaster declaration on Pool payments to Registered Holders outstanding Pool balances pro rata 10/05/2017, Private Non-Profit of Pool Certificates are made monthly across the remaining pool loan principal organizations that provide essential and consist of scheduled payments of within a Pool. When a pool loan services of a governmental nature may pool principal and interest. The subsequently prepays in full, payments file disaster loan applications at the ethrower on DSK3G9T082PROD with NOTICES payments may also include a return of to Registered Holders of Pool address listed above or other locally pool principal from full or partial Certificates may include retained announced locations. prepayments of pool loans prior to the principal in addition to the scheduled The following areas have been Pool maturity date. Principal from these payments of pool principal, interest and determined to be adversely affected by prepayments are passed through to related prepayments. This change will the disaster: be incorporated, as needed, into the Primary Counties: Saint Croix, Saint 27 17 CFR 200.30–3(a)(12). SBA Secondary Market Program Guide, John, Saint Thomas. VerDate Sep<11>2014 16:59 Oct 13, 2017 Jkt 244001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\16OCN1.SGM 16OCN1


Document Created: 2017-10-14 01:42:59
Document Modified: 2017-10-14 01:42:59
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesThe change referenced in this Notice affects all outstanding Pools issued between October 1, 2004, and on or about September 1, 2017. The change will be incorporated into payments made to Registered Holders of Pool Certificates before the end of the calendar year.
ContactJohn M. Wade, Chief, Secondary Market Division, U.S. Small Business Administration, 409 3rd Street SW., Washington, DC 20416, or [email protected]
FR Citation82 FR 48144 
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