Silicon Valley Bank Creditors Purchased Bonds At Distressed Levels Anticipating Potential Bankruptcy Sale


Silicon Valley Bank's parent, SVB Financial Group's SIVB creditors, have formed a group in the case of a potential bankruptcy filing.

  • The PJT Partners Inc PJT-advised group is anticipating the fallen bank to file for bankruptcy and auction off its non-bank businesses.
  • SVB Financial Group has reportedly appointed a restructuring committee to explore strategic alternatives. It hasn't said whether it plans to file for bankruptcy.

Also Read: SVB Financial Collapse Triggers Experts Fear Of Softbank Buyback, Alibaba Mark Down, Arm IPO Valuation Cut.

  • The investor group includes Centerbridge Partners LP, Davidson Kempner Capital Management LP, and Pacific Investment Management Co. (Pimco).
  • The group now holds a substantial part of SVB Financial's $3.4 billion face value of bonds after it bought them into the weekend as they traded down to around 30 cents on the dollar, The Wall Street Journal reported.
  • The bondholder group could profit if SVB Financial's assets fetch a high enough valuation in any such auction. The report added that when a company's assets are sold through bankruptcy, the proceeds often flow to its creditors.
  • The Federal Reserve is reportedly mulling stricter rules and oversight for midsize banks that are similar in size to the collapsed Silicon Valley Bank.
  • A review of the bank's failure by Fed Vice Chair for Supervision Michael Barr could pave the way for strengthened rules on banks in the $100 billion to $250 billion range.

Now Read: A Look At First Republic Bank's Chart Following SVB Financial Collapse

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