SVB Financial Files for Ch. 11 bankruptcy protection, says it has $2.2B in liquidity

A week after SVB Financial went bust and regulators took over the holding company for Silicon Valley Bank and other subsidiaries, SVB Financial took the next inevitable step: it announced today that it has officially filed for Chapter 11 bankruptcy protection in the US. Bankruptcy Court for the Southern District of new york. This means that SVB Financial can apply to the courts and plans to apply to continue activities while looking for buyers for the assets, which includes the plan to sell from SVB Securities and SVB Capital, among others.

As part of that process, SVB Financial is disclosing the financial condition of the stock company, which had a market cap of about $12 billion before shares fell to the bank last Friday. (Trading was halted until the market cap was halved from $12 billion.)

The statement said the company “believes that it has approx 2.2 billion dollars Liquidity” also noted that funded debt is approx. 3.3 billion dollars The amount of the “generally unsecured notes” which serve only for SVB Financial Group, and which have no claims against SVB Capital or SVB Securities, which are legally separate entities. SVB Financial Group has “also. 3.7 billion dollars Preferred Equity Superior,” he said.

“SVB Financial Group intends to use the court-supervised process to evaluate strategic options for SVB Capital, SVB Securities and the company’s other assets and investments,” it said in a statement. That effort is being led by a five-member restructuring committee, assisted by Center View Partners LLC. Any sale would be conducted through a Chapter 11 proceeding and subject to court approval, he added.

He also provided updates on current and previous asset sales within the group.

There have been many hurdles in the search for a buyer for SVB’s banking unit, which after the takeover is now called Silicon Valley Bridge Bank. That process is under the control of regulators. On the contrary, the group said it has “significant interest” in SVB Securities and SVB Capital. These two are still housed under SVB Financial, but are technically separate entities and therefore not included in the Chapter 11 filing or the sale of Bridge Bank. It also continues to work when shoppers are shopping separately, which started earlier this week.

The main thing about Chapter 11 is that SVB Financial Group can continue to operate without FDIC oversight as it moves through the next stages.

To that end, the holding company said it plans to file “regular first-day motions with the bankruptcy court, seeking, among other things, permission to hear SVB Financial Group’s operations in the ordinary course of business.” Scheduled. Additional documents related to the bankruptcy court proceedings will be filed in the coming days,” the company said in a statement.

“The Chapter 11 process allows SVB Financial Group to preserve value while evaluating strategic options for its valued businesses and assets, particularly SVB Capital and SVB Securities.” William CosturosChief Restructuring Officer of SVB Financial Group, in a statement. “SVB Capital and SVB Securities continue to serve and serve their clients under the leadership of their long-standing and independent management teams.”

As we previously reported, SVB Capital has approximately $9.5 billion in assets under management, with investments in several major VCs and funds as well as direct startups. SVB Securities has been around in one form or another since 1999. Based out of Boston, it brokers M&A and offers other services to startups and others in nearly 700 deals.

SVB Financial also said that in addition to cash and interest in SVB Capital and SVB Securities, “the financial group has other important investment securities accounts and other assets and is exploring strategic options.” I didn’t go into the details of those in today’s statement, but we’ll likely see more as the story unfolds in the coming weeks.

In a call to corporate clients on Friday, Silicon Valley Bridge Bank CEO Tim Myopoulos said the presentation sounded like he was reading from a script. “All of Silicon Valley Bridge Bank’s obligations are backed by the full faith and credit of the FDIC and the US government,” SVB Bank, SVB Securities and SVB Capital said, noting they are included in the bankruptcy filing. The previous statement. Wealth and private banking businesses are included in the bankruptcy filing.

“We’re trying to show very clearly which facilities are affected and which are not,” he said on the call, amid several questions from customers on the morning news.

Additional reporting Natasha Maskerenhas.

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