[Federal Register Volume 61, Number 198 (Thursday, October 10, 1996)]
[Notices]
[Pages 53256-53259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26061]


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SMALL BUSINESS ADMINISTRATION


Notice; Interest Rates

    The Small Business Administration publishes an interest rate called 
the optional ``peg'' rate (13 CFR 122.8-4(d)) on a quarterly basis. 
This rate is a weighted average cost of money to the government for 
maturities similar to the average SBA direct loan. This rate may be 
used as a base rate for guaranteed fluctuating interest rate SBA loans. 
This rate will be 6\7/8\ percent for the October-December quarter of FY 
97.
    Pursuant to 13 CFR 108.503-8(b)(4), the maximum legal interest rate 
for a commercial loan which funds any portion of the cost of a project 
(see 13 CFR 108.503-4) shall be the greater of 6% over the New York 
prime rate or the limitation established by the constitution or laws of 
a given State. The initial rate for a fixed rate loan shall be the 
legal rate for the term or the loan.
John R. Cox,
Associate Administrator for Financial Assistance.

Calculation of SBA's Peg Rate and Direct Lending Rate

    SBA's PEG RATE is a Weighted Average of the last three months like-
maturity rates from the Treasury Department, as follows:

------------------------------------------------------------------------
                                                                Weighted
                    Month                       Weight   Rate     rate  
------------------------------------------------------------------------
July.........................................        1      7       7   
August.......................................        2      7      14   
September....................................        3   6.75      20.25
                                              --------------------------
  Sum........................................  .......  .....      41.25
Divide by 6 to get peg rate 6.875=peg rate; round to the nearest        
 eighth=6\7/8\                                                          
SBA's direct rate is last month's like-maturity Treasury Rate plus 1%,  
 as follows:                                                            
September--6.75+1                                                       
Direct Rate=Last Month+1=7.75                                           
Peg Rate: 6\7/8\                                                        
Direct Rate: 7.750%                                                     
------------------------------------------------------------------------

Average Maturity Calculation

# Of EOL Loans, 1404--12.5 Average Maturity of EOL Loans
# Of HAL Loans, 954--14.42 Average Maturity of HAL Loans
# Of VET Loans, 816--10.92 Average Maturity of VET Loans

                            Weighted Average                            
Weight-EOL Loans...............   0.442344   5.529300                   
Weight-HAL Loans...............   0.300567   4.334177                   
Weight-VET Loans...............   0.257088   2.807410                   
                                ----------------------------------------
    Sum........................          1   12.67088  =Average         
                                                        Maturity.       
                                                                        


[[Page 53257]]


                                Table 1.--Interest Rates for Specific Maturities                                
----------------------------------------------------------------------------------------------------------------
                                                                                Indicated for                   
                                                             Used for August   September 1996        Changes    
                                                             1996 (percent)       (percent)                     
----------------------------------------------------------------------------------------------------------------
1 year....................................................            5\7/8\            5\3/4\            -\1/8\
5 years...................................................            6\5/8\            6\3/8\            -\1/4\
15 years..................................................                 7            6\7/8\            -\1/8\
20 years..................................................            7\1/8\                 7            -\1/8\
----------------------------------------------------------------------------------------------------------------


   Table 2.--Range of Maturities To Which the Rates for September 1996  
                                  Apply                                 
------------------------------------------------------------------------
              From                          To            Rate (percent)
------------------------------------------------------------------------
 0 years--3 months.............   0 years--4 months.....          5\1/4\
 0 years--5 months.............   0 years--6 months.....          5\3/8\
 0 years--7 months.............   0 years--9 months.....          5\1/2\
 0 years--10 months............   0 years--11 months....          5\5/8\
 1 year--0 months..............   1 year--2 months......          5\3/4\
 1 year--3 months..............   1 year--6 months......          5\7/8\
 1 year--7 months..............   1 year--11 months.....               6
 2 years--0 months.............   2 years--6 months.....          6\1/8\
 2 years--7 months.............   3 years--7 months.....          6\1/4\
 3 years--8 months.............   5 years--2 months.....          6\3/8\
 5 years--3 months.............   7 years--4 months.....          6\1/2\
 7 years--5 months.............  10 years--6 months.....          6\5/8\
10 years--7 months.............  14 years--0 months.....          6\3/4\
14 years--1 month..............  17 years--10 months....          6\7/8\
17 years--11 months............  23 years--5 months.....               7
23 years--6 months.............  30 years--0 months.....         6\7/8\ 
------------------------------------------------------------------------
The rates shown for September are based on average market yields from   
  July 21, 1996 through August 20, 1996.                                


                                Table 1.--Interest Rates for Specific Maturities                                
----------------------------------------------------------------------------------------------------------------
                                                              Indicated for                                     
                                            Used for July      August 1996                  Changes             
                                           1996 (percent)       (percent)                                       
----------------------------------------------------------------------------------------------------------------
1 year..................................            5\3/4\            5\7/8\  +\1/8\.                           
5 years.................................            6\5/8\            6\5/8\  Unchanged.                        
15 years................................                 7                 7  Unchanged.                        
20 years................................            7\1/8\            7\1/8\  Unchanged.                        
----------------------------------------------------------------------------------------------------------------


 Table 2.--Range of Maturities to Which the Rates for August 1996 Apply 
------------------------------------------------------------------------
              From                          To            Rate (percent)
------------------------------------------------------------------------
 0 years--3 months.............  Only...................          5\1/4\
 0 years--4 months.............   0 years--5 months.....          5\3/8\
 0 years--6 months.............   0 years--7 months.....          5\1/2\
 0 years--8 months.............   0 years--9 months.....          5\5/8\
 0 years--10 months............   0 years--11 months....          5\3/4\
 1 year--0 months..............   1 year--2 months......          5\7/8\
 1 year--3 months..............   1 year--5 months......               6
 1 year--6 months..............   1 year--8 months......          6\1/8\
 1 year--9 months..............   2 years--1 months.....          6\1/4\
 2 years--2 months.............   2 years--9 months.....          6\3/8\
 2 years--10 months............   4 years--0 months.....          6\1/2\
 4 years--1 month..............   5 years--7 months.....          6\5/8\
 5 years--8 months.............   8 years--1 month......          6\3/4\
 8 years--2 months.............   11 years--11 months...          6\7/8\
12 years--0 months.............   16 years--0 months....               7
16 years--1 month..............   27 years--1 month.....          7\7/8\
27 years--2 months.............   29 years--7 months....               7
------------------------------------------------------------------------


                                Table 1.--Interest Rates for Specific Maturities                                
----------------------------------------------------------------------------------------------------------------
                                                              Indicated for                                     
                                            Used for June       July 1996                   Changes             
                                           1996 (percent)       (percent)                                       
----------------------------------------------------------------------------------------------------------------
1 year..................................            5\5/8\            5\3/4\  +\1/8\                            
5 years.................................            6\3/8\            6\5/8\  +\1/4\                            

[[Page 53258]]

                                                                                                                
15 years................................            6\7/8\                 7  +\1/8\                            
20 years................................            7\1/8\            7\1/8\  Unchanged                         
----------------------------------------------------------------------------------------------------------------


  Table 2.--Range of Maturities To Which the Rates for July 1996 Apply  
------------------------------------------------------------------------
              From                          To                 Rate     
------------------------------------------------------------------------
0 years-3 months...............  0 years-4 months.......          5\1/4\
0 years-5 months...............  0 years-6 months.......          5\3/8\
0 years-7 months...............  0 years-8 months.......          5\1/2\
0 years-9 months...............  0 years-10 months......          5\5/8\
0 years-11 months..............  1 year-1 month.........          5\3/4\
1 year-2 months................  1 year-3 months........          5\7/8\
1 year-4 months................  1 year-6 months........               6
1 year-7 months................  1 year-10 months.......          6\1/8\
1 year-11 months...............  2 years-3 months.......          6\1/4\
2 years-4 months...............  3 years-2 months.......          6\3/8\
3 years-3 months...............  4 years-3 months.......          6\1/2\
4 years-4 months...............  5 years-8 months.......          6\5/8\
5 years-9 months...............  8 years-4 months.......          6\3/4\
8 years-5 months...............  12 years-7 months......          6\7/8\
12 years-8 months..............  16 years-1 month.......               7
16 years-2 months..............  26 years-0 months......          7\1/8\
26 years-1 month...............  29 years-8 months......               7
------------------------------------------------------------------------
The rates shown for July are based on average market yields from May 21,
  1996 through June 20, 1996.                                           


                           Average Loan Maturity by Loan Program; Loan Portfolio Basis                          
                                            [Quarter ended 06/30/96]                                            
----------------------------------------------------------------------------------------------------------------
                                                             Total maturity   Average maturity  Average maturity
              Loan program                 Number of loans       months            months             years     
----------------------------------------------------------------------------------------------------------------
Business 7(A):                                                                                                  
    Direct..............................             1,123           233,852               208             17.33
    Immed Part..........................                35             7,603               217             18.08
    Guaranty............................           175,191        24,441,973               140             11.67
                                         -----------------------------------------------------------------------
        Total...........................           176,349        24,683,428               140             11.67
EOL:                                                                                                            
    Direct..............................             1,404           211,096               150             12.50
    Immed Part..........................                 4               833               208             17.33
    Guaranty............................               379            56,968               150             12.50
                                         -----------------------------------------------------------------------
        Total...........................             1,787           268,897               150             12.50
Handicapped:                                                                                                    
    Direct..............................               954           164,866               173             14.42
    Immed Part..........................                38             7,526               198             16.50
    Guaranty............................                 7             1,613               230             19.17
                                         -----------------------------------------------------------------------
        Total...........................               999           174,005               174             14.50
Veterans:                                                                                                       
    Direct..............................               816           106,847               131             10.92
    Immed Part..........................                 2               480               240             20.00
    Guaranty............................                 0  ................  ................               .00
                                         -----------------------------------------------------------------------
        Total...........................               818           107,327               131             10.92
SBIC:                                                                                                           
    Direct..............................               117            16,485               141             11.75
    Immed Part..........................                 0  ................  ................               .00
    Guaranty............................               212            26,832               127             10.58
                                         -----------------------------------------------------------------------
        Total...........................               329            43,317               132             11.00
Displ Bus:                                                                                                      
    Direct..............................               393           125,707               320             26.67
    Immed Part..........................                39            11,513               295             24.58
    Guaranty............................                 2               546               273             22.75
                                         -----------------------------------------------------------------------
        Total...........................               434           137.766               317             26.42
----------------------------------------------------------------------------------------------------------------


[[Page 53259]]

[FR Doc. 96-26061 Filed 10-9-96; 8:45 am]
BILLING CODE 8023-01-M