The September 2012 pooling of Small Business Investment Company (“SBIC”) debentures was priced at 2.245%, which is the lowest pricing of debentures in the history of the SBIC program. The prior pooling of debentures in March 2012 was priced at 2.766%, which was a record low for SBIC debenture pricing at that time. SBICs that draw down debentures before the next debenture pooling in March 2013 will lock in this 2.245% interest rate for the ten-year term of the debentures.

Debenture interest payments are due semi-annually, and a balloon payment of the entire principal amount of the debentures is due on the tenth anniversary of the pooling. The SBIC program also imposes an annual fee on the debentures that is currently set at .804%. The annual fee for leverage commitments made between October 1, 2012 and September 30, 2013 has not yet been determined. SBIC debentures may be prepaid in whole or in part at any time, without premium or penalty. SBICs are not permitted to refinance outstanding debentures to take advantage of the new rate under current SBIC regulations.

The historically low pricing on SBIC debentures has led to increased interest in the SBIC program as a source of inexpensive capital.