The parent company of Silicon Valley Bank (SVB), SVB Financial Group, has filed for bankruptcy on Friday (Mar. 17) to reorganize itself and find other options for its subsidiaries.
The bankruptcy won’t affect SVB Capital, which is a venture capital and private credit fund with capital call facilities and committed capital from investors and general partners. It also won’t affect SVB Securities, which is a regulated broker-dealer, an entity that can trade securities for its clients. SVB Financial Group says it plans to use the court-supervised Chapter 11 process to figure out what to do with its other subsidiaries.
“SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams,” said William Kosturos, chief restructuring officer for SVB Financial Group, in a press release.
The bankruptcy won’t affect the new Silicon Valley Bridge Bank, which is the successor to Silicon Valley Bank and has been taken over by the Federal Deposit Insurance Corporation (FDIC). This means that the bank’s private banking and wealth management business will be handled separately by the FDIC, while SVB Financial Group undergoes its restructuring process.
SVB’s collapse last week marked the second-largest banking failure in US history, sparking fears of a banking crisis that prompted regulators to assure depositors they would be able to access their funds. Kustoros said that SVB Financial Group intended to keep working with Silicon Valley Bridge Bank: “We are committed to finding practical solutions to maximize the recoverable value for stakeholders of both entities.”
SVB Financial Group’s financials, by the digits:
$2.2 billion: Liquidity declared by SVB Financial Group
$3.3 billion: Size of company’s unsecured debt
$3.7 billion: Value of the company’s preferred stock
Related stories
🇨🇳 Silicon Valley Bank helped finance China’s innovation economy. What happens next?
🏦 Big banks have come to the rescue of First Republic after SVB’s collapse
🌐 Silicon Valley Bank’s collapse is hitting financial hubs around the globe