SVB Financial Group starts Chapter 11 to preserve value
SVB Securities and SVB Capital’s funds and general partner entities NOT included in Chapter 11 filing
Strategic alternative process for SVB Capital and SVB Securities operations underway with considerable interest
SANTA CLARA, California, March 17, 2023 /PRNewswire/ — SVB Financial Group (the “Company”) (NASDAQ: SIVB) announced today that it has filed for a voluntary Chapter 11 Supervised Reorganization in the United States The probate court for the Sør district New York to preserve value.
SVB Securities and SVB Capital̵[ads1]7;s funds and general partner entities are not included in the Chapter 11 filing and continue to operate in the ordinary course as SVB Financial Group continues its previously announced exploration of strategic options for these valuable businesses.
- SVB Capital, a platform for venture capital and private credit funds with deep roots in the innovation economy, continues to operate as usual and serve its clients. The SVB Capital funds and general partners are separate legal entities, distinct from SVB Financial Group, and are not included in the Chapter 11 filing. SVB Capital funds continue to have access to funding sources, including underwriting credit facilities and investor and general partner commitments. SVB Financial Group is committed to providing SVB Capital with support throughout the reorganization process.
- SVB Securities, a regulated broker-dealer with its own management, employees and capital, is a separate legal entity from SVB Financial Group and is not included in the Chapter 11 filing. It continues to function as normal. SVB Financial Group, which owns the shares in SVB Securities, is committed to providing SVB Securities with support throughout the reorganization process.
- SVB Financial Group is no longer affiliated with Silicon Valley Bank, NA, or the bank’s private banking and wealth management business, SVB Private. The bank’s successor, Silicon Valley Bridge Bank, NA, operates under the jurisdiction of the Federal Deposit Insurance Corporation (“FDIC”) and is not included in the Chapter 11 filing.
The company believes it has approx 2.2 billion dollars of liquidity. In addition to cash and its holdings in SVB Capital and SVB Securities, SVB Financial Group has other valuable investment accounts and other assets for which it is also exploring strategic options.
SVB Finanskonsern’s financed debt is approx 3.3 billion dollars in total principal of unsecured notes, which is only recourse to SVB Financial Group and has no claim against SVB Capital or SVB Securities. SVB Finanskonsern also has 3.7 billion dollars of outstanding preferred equity.
SVB Financial Group intends to use the court-supervised process to assess strategic alternatives for SVB Capital, SVB Securities and the company’s other assets and investments. As previously announced, this process is led by a restructuring committee of five members appointed by the board of SVB Finanskonsern. Centerview Partners LLC is assisting the restructuring committee with the strategic options process, which is already underway and has attracted significant interest. Any sale process 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 its value as it evaluates strategic options for its valued businesses and assets, particularly SVB Capital and SVB Securities,” said William Kosturos, transformation manager for SVB Finanskonsern. “SVB Capital and SVB Securities continue to operate and serve clients, led by their long-standing and independent management teams.”
“SVB Financial Group will continue to work with Silicon Valley Bridge Bank,” Kosturos said. “We are committed to finding practical solutions to maximize the recoverable value for stakeholders in both entities.”
SVB Finanskonsern plans to submit customary first-day petitions to the Insolvency Court, which, among other things, apply for permission to continue the operation of SVB Finanskonsern in the ordinary way as soon as a hearing can be arranged. Further documents related to the bankruptcy court’s processing will be submitted in the coming days.
Centerview Partners LLC is the proposed financial advisor, Sullivan & Cromwell LLP is the proposed legal advisor and Alvarez & Marsal is the proposed restructuring advisor for SVB Financial Group as debtor-in-possession.
About SVB Finanskonsern
SVB Financial Group (Nasdaq: SIVB) is the holding company for SVB Capital and SVB Securities.
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond SVB Financial Group’s control. Forward-looking statements are statements that are not historical facts and generally can be identified by the use of such words as “will,” “may,” “will,” “should,” “could,” “would,” “predict,” “potential” , “continue,” “anticipate,” “believe,” “estimate,” “seek,” “expect,” “plan,” “intend,” the negative of such words or comparable terminology. Although SVB Financial Group believes that the expectations reflected in SVB Financial Group’s forward-looking statements are reasonable, SVB Financial Group has based these expectations on its current opinion as well as its assumptions, and such expectations may prove to be incorrect. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are beyond SVB Financial Group’s control. Forward-looking statements relating to the offers and SVB Financial Group’s actual operating results and financial results may differ materially from those expressed in or implied by SVB Financial Group’s forward-looking statements. The forward-looking statements included in this disclosure are made only as of the date of this disclosure. SVB Financial Group does not intend, and undertakes no obligation, to update these forward-looking statements.
Joel FrankWilkinson Brimmer Catcher
Michael Friday / Jed Repko / Aaron Palash
SOURCE SVB Finanskonsern