The News
SVB Financial, the parent company of Silicon Valley Bank (SVB), on Friday said it has filed for Chapter 11 bankruptcy, a week after SVB was taken over by U.S. regulators.
The company noted that its funded debt stands at roughly $3.3 billion and that it has ”$3.7 billion of preferred equity outstanding.”
SVB Securities and SVB Capital’s funds and entities are not included in the Chapter 11 filing.
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According to a statement released by the parent company Friday, the process will be led by a five-member restructuring committee appointed by SVB Financial’s board of directors.
Any potential sales will be conducted “through the Chapter 11 proceeding and be subject to court approval.”
“The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets, especially SVB Capital and SVB Securities,” said Chief Restructuring Officer for SVB Financial Group, William Kosturos, in a statement.
“SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.”
Step Back
SVB, the country’s 15th largest bank, collapsed and was taken over by the U.S. Federal Deposit Insurance Corporation (FDIC) last Friday. Soon after, Signature Bank, also shut.
On Sunday, U.S. Treasury Secretary Janet Yellen said that they would use a “systemic risk exception” to supplement uninsured deposits. Customers would then be able to access those deposits by Monday.
While the public feared that the dual banking collapse would lead to devastation similar to the 2008 financial crisis, Semafor’s Business editor Liz Hoffman recently wrote that: “This isn’t 2008 and the blast radius.”
“For one thing, the bad bets at the heart of this collapse weren’t on toxic real estate securities but largely plain-vanilla bonds — most of them Treasury bonds — that can be easily valued and sold,” Hoffman wrote.
Notable
In mid-2020, Goldman Sachs was toying with the idea of buying SVB, “whose enviable roster of tech clients and recent surge of deposits would both have slotted neatly into Goldman’s businesses and priorities,” Semafor’s Business editor Liz Hoffman wrote.
Read her latest story here.
Contact
Want to pass along a tip or feedback? Write to Karina at ktsui@semafor.com