Commercial Loan Pricing Market Update (May 4-8)

May 11, 2020 Anna-Fay Lohn

Each week since early March, we’ve posted updates on the commercial loan pricing markets, based on what we’ve seen when examining the PrecisionLender dataset. We look at several popular metrics and point out areas in which there have been noteworthy changes. 

Today’s update is through the end of last week – May 8. If you’d like to see our previous weekly pricing market updates, you can find them here.  

As the first chart below will show, recent volume continues to be low by pre-COVID-19 standards. So while the developments we point out are certainly worth monitoring, they should also be taken with a proverbial grain of salt, given the smaller-than-usual sample size. 

NOTE: PrecisionLender’s data reflects opportunities actual commercial opportunities priced (loans, deposits, and other fee-based business) by more than 150 banks in the United States, ranging in size from small community banks to top 10 U.S. institutions. In addition to their variance in size, these banks are also geographically diverse, with borrowers in all 50 states.

Volume Rebounds From YTD Low 

As previously mentioned, commercial pricing activity outside of PPP has been lighter than pre-COVID levels. But last week volume picked up by 34% from the previous week, which was the lowest period, year-to-date. Still the volume for the past five weeks is approximately 37% lower than pre-COVID run rates. 

Priced Commercial Loan Volume by Week

Floating Rate Deals Shift from LIBOR to Prime

While deal based on 1-Month LIBOR have become less common (just 16% of the mix), prime-based floating rate deals jumped up in frequency (from 16 to 22%).

Mix by Rate Type

LIBOR Spreads Spike

The comparatively fewer deals that were based on LIBOR experienced wider spreads, up 20 basis points over the previous week, and registered the highest level of any week in 2020. 

Spread to 1-Month LIBOR

This is likely a combination of opportunistic pricing or yield protection on a smaller number of deals and a significant drop in the index rate. Note that the funding curve for 1-month LIBOR has dropped nearly 40 bps in the past two weeks. 

3-Month LIBOR Swap Curve

Big NIM Increases for Floating & Fixed Rate Deals

It’s not clear why yields rose on fixed-rate deals, other than again pointing to opportunistic pricing as the most likely explanation. Those yields, along with lowered COF, led to a 24 bps jump in fixed-rate NIM, week over week. 

Fixed-Rate NIM Composition

It was a similar story with floating-rate deals, as a 15 bps week-over-week increase in yield and the aforementioned drop in COF led to a whopping 40+ bps increase in NIM, to 3.16%.

Floating-Rate NIM Composition


Both metrics, though, should be viewed against the context of the low volume numbers. 

Maturities & Amoritizations Below Q1 Levels

Fixed-rate amortizations remained lower over the past three weeks, when compared to Jan-March pricing activity. Fixed-rate maturities remained around the six-year mark. Floating rate maturities are around the 2.5 year mark, a drop from the 3-year lengths in the January-March time frame.

Floating- and fixed-rate maturities have been steady the past three weeks, but are both well off from Jan-March levels. 

Maturity and Amortization in Months

Got Questions? 

Our banking consultants and data scientists are combing through PrecisionLender pricing data every day. If there’s anything you’d like to know about what they’re seeing, please send along your questions to








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