The SVB Financial Group has reportedly voluntarily filed a petition with the United States Bankruptcy Court under Chapter 11 to reorganize under court oversight to preserve value.
Funds and general partners are not subject to bankruptcy proceedings
On March 17 stated SVB that the funds and general partners of SVB Securities and SVB Capital are not subject to the bankruptcy proceedings. These entities will continue to operate as SVB Financial Group continues to explore strategic alternatives for its activities.
The company also stressed that it is no longer associated with Silicon Valley Bank NA or the bank’s private banking and asset management arm, SVB Private. The bank’s successor, Silicon Valley Bridge Bank, NA, falls under the jurisdiction of the Federal Deposit Insurance Corporation (FDIC) and is not included in the Chapter 11 filing. It is noteworthy that they will continue to work with the Silicon Vallet Bridge Bank, even though they are no longer associated with it.
Estimated liquidity and debt
SVB Financial Group estimates its liquidity at approximately $2.2 billion. In addition to cash and interests in SVB Capital and SVB Securities, the company also has valuable securities investment accounts and other assets for which it is exploring strategic alternatives.
However, SVB Financial Group’s funded debt is approximately $3.3 billion in unsecured notes, which have a claim only on SVB Financial Group and not on SVB Capital or SVB Securities. In addition, the company also has $3.7 billion in preferred stock outstanding. It is not yet known what exactly the company’s next step will be within this newly initiated procedure.