Debenture Deal Factors Prepayment Experience

Pooled SBIC Debentures have a 10 year term.  SBICs have the option of prepaying pooled Debentures prior to maturity on any Payment Date after pooling.  Prepaid principal is distributed pro-rata to the investors in each pool.  A default by an SBIC may result in an acceleration the SBIC’s Debentures, at which time SBA purchases the Debentures out of the pools.  Acceleration payments are distributed pro-rata to the investors in each pool.  The Debenture Deal Factors provide prepayment and acceleration experience by pool by percentage.