The March 2016 pooling of Small Business Investment Company (SBIC) debentures was priced at 2.507%, which is near the all-time record low rate. This is reduced from the previous semi-annual pricing of 2.829% for SBIC debentures in the September 2015 pooling.
SBICs that drew down debentures between the September 2015 and March 2016 poolings locked in this 2.507% interest rate for the ten-year term of the debentures. The pricing of SBIC debentures generally runs in tandem with the 10 year T-bill. The 10 year T-bill had a rate of 1.966% at the time of pricing, resulting in a spread of 0.541% for the SBIC debentures.
SBIC debenture interest payments are due semi-annually. The debentures are non-amortizing, with a balloon payment of the entire principal amount of the debentures due in ten years. SBIC debentures may be prepaid without premium or penalty.