SVB Securities and the funds of SVB Capital and general partners NOT included in the Chapter 11 filing
Strategic alternative process for SVB Capital and SVB Securities Operations is underway with considerable interest
SANTA CLARA, California., March 17, 2023 /PRNewswire/ — SVB Financial Group (“the Company”) (NASDAQ: SIVB) announced today that it has filed a voluntary filing for a Chapter 11 court-supervised reorganization in The United States Bankruptcy Court for the Southern District of new York to preserve value.
The funds and general partners of SVB Securities and SVB Capital are not included in the Chapter 11 filing and will continue to operate as normal while SVB Financial Group continues its previously announced exploration of strategic alternatives for these valuable companies.
- SVB Capital, a venture capital and personal loan fund platform with deep roots in the innovation economy, continues to operate and serve its clients as usual. 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 commitments from investors and general partners. SVB Financial Group is committed to supporting SVB Capital 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. Operations continue as usual. SVB Financial Group, which holds the equity of SVB Securities, is committed to supporting SVB Securities throughout the restructuring 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 estimates that there will be approx $2.2 billion of liquidity. In addition to cash and its shares in SVB Capital and SVB Securities, SVB Financial Group has other valuable investment accounts and other assets for which it is also evaluating strategic alternatives.
The financed debt of the SVB Financial Group is approx $3.3 billion in aggregate principal amount of unsecured debentures which are recourse only to SVB Financial Group and have no claim against SVB Capital or SVB Securities. The SVB Financial Group also has $3.7 billion of the outstanding preference shares.
SVB Financial Group intends to use the court-supervised process to evaluate strategic alternatives for SVB Capital, SVB Securities and the Company’s other assets and investments. As previously announced, this process will be led by a five-person Restructuring Committee appointed by the Board of Directors of SVB Financial Group. Centerview Partners LLC is assisting the Restructuring Committee with the Strategic Alternatives process, which is underway and has generated significant interest. Each sale process will be conducted under Chapter 11 proceedings and is subject to court approval.
“The Chapter 11 process will allow SVB Financial Group to preserve value while evaluating strategic alternatives for its valuable businesses and assets, particularly SVB Capital and SVB Securities,” he said William Kosturos, Chief Restructuring Officer of SVB Financial Group. “SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.”
“SVB Financial Group will continue to work cooperatively with Silicon Valley Bridge Bank,” continued Mr. Kosturos. “We are committed to finding practical solutions to maximize the achievable value for stakeholders of both companies.”
SVB Financial Group plans to file standard first-day motions with the bankruptcy court, which seek, among other things, permission to continue SVB Financial Group’s business as usual once a hearing can be scheduled. Additional documents related to the bankruptcy court proceedings will be filed in the coming days.
Centerview Partners LLC is proposed as financial advisor, Sullivan & Cromwell LLP as legal advisor and Alvarez & Marsal as restructuring advisor to SVB Financial Group in self-administration.
About the SVB Finance Group
SVB Financial Group (Nasdaq: SIVB) is the holding company for SVB Capital and SVB Securities.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of SVB Financial Group. Forward-looking statements are statements that are not historical facts and are generally identified by the use of words such as “will”, “may”, “will”, “should”, “could”, “would”, “predict, “potential”, “continue”, “anticipate”, “believe”, “estimate”, “aim”, “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 beliefs and assumptions, and such expectations may prove to be not prove correct. Because forward-looking statements relate to the future, they involve inherent uncertainties, risks and changes in circumstances that are difficult to predict, many of which are beyond the control of SVB Financial Group. Forward-looking statements relating to the Offerings and SVB Financial Group’s actual results of operations and financial results may differ materially from those expressed or implied by SVB Financial Group’s forward-looking statements. The forward-looking statements contained in this disclosure speak only as of the date of this disclosure. SVB Financial Group does not intend and assumes no obligation to update these forward-looking statements.
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SOURCE SVB Financial Group