Silicon Valley Bank’s former parent company filed for bankruptcy a week after a run on deposits prompted regulators to seize its banking unit.
Because Silicon Valley Bank was a California-chartered commercial bank and part of the Federal Reserve system, it is not eligible for bankruptcy and landed in Federal Deposit Insurance Corp. receivership instead. Its former parent, however, is eligible to file in order to protect its remaining assets and work on repaying creditors, including bondholders.
Following the receivership, SVB Financial is no longer affiliated with Silicon Valley Bank NA or its private banking and wealth management business, SVB Private, the company said.
SVB “believes” it has about $2.2 billion of liquidity and counts its equity in SVB Capital and SVB Securities among its assets, according to the statement. It owes bondholders about $3.3 billion.
Centerview Partners is helping SVB evaluate strategic alternatives for SVB Capital and SVB Securities. The process has garnered significant interest, and any sale would require bankruptcy court approval, according to the statement.
“SVB Financial Group will continue to work cooperatively with Silicon Valley Bridge Bank,”
Santa Clara, California-based SVB was the biggest bank to fail in more than a decade, with about $209 billion in total assets as of the end of last year, the FDIC said. It’s also the second largest bank to fall under the agency’s receivership, behind only
Silicon Valley Bank was founded in 1983 over a poker game between Bill Biggerstaff and Robert Medearis, according to a statement from the bank’s 20th anniversary. The firm specialized in providing financial services to tech startups.
SVB Financial Corp. held about $2.3 billion of cash, $500 million of investment securities and $475 million of other assets as of Dec. 31, according to regulatory filings.
SVB bonds moved higher on Friday morning. The company’s 2.1%
The case is SVB Financial Group,
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