UPDATE 2: 3:48 p.m. ET 3/14/2023: U.S. Bank as indenture trustee to various tranches of SVB Financial Group’s unsecured bonds is represented by Seward & Kissel as legal advisor, according to sources.
U.S. Bank and Seward & Kissel did not immediately respond to requests for comment.
--Harvard Zhang
UPDATE 1: Certain SVB Holdco Bondholders Organize With Davis Polk as CounselUPDATE 1: 3:03 p.m. ET 3/14/2023: Some unsecured creditors to SVB Financial Group have organized with Davis Polk as legal advisor, according to sources. The law firm hosted a call for bondholders on Sunday, March 12, the sources said.
Trading of the company’s unsecured bonds has seen heavy volume since the end of last week with distressed investors buying in, according to sources.
Davis Polk did not respond to a request for comment.
–Patrick Fitzgerald, Simon Schatzberg, Harvard Zhang
Original Story 12:16 p.m. UTC on March 14, 2023SVB HoldCo Bondholders Consult Restructuring Advisors; FDIC Advised by Piper Sandler’s IB, TRS TeamsUnsecured creditors to SVB Financial Group are mobilizing and speaking with restructuring advisors in preparation for an expected chapter 11 filing, according to sources. Investors and advisors are focused on asset valuation and
recovery in court, they said. The unsecured bonds last traded in size in the high 40s today, compared with the mid-80s last week, according to TRACE.
Davis Polk
advised the joint book-running managers on the SEC-registered offering by SVB Financial Group of $500 million aggregate principal amount of the company’s 3.125% senior notes due 2030 and the $350 million aggregate principal amount of 4.345% fixed-rate/floating-rate senior notes due 2028 and $450 million aggregate principal amount of 4.57% fixed-rate/floating-rate senior notes due 2033 by SVB.
Separately, the Federal Deposit Insurance Corp. is working with Piper Sandler’s investment banking and restructuring (TRS) teams on a sale process, sources said. The commercial banking and wealth management segments may be sold to another bank, while the venture capital and investment banking arms may have a separate buyer, they added.
People involved with Silicon Valley Bank and related parties in Silicon Valley prefer the assets be sold to one buyer, according to sources, particularly one which will keep the underwriting and client management teams from Silicon Valley Bank. Government regulators are skeptical of a wholesale of SVB’s assets to a large bank, sources said, fearing concentration risk and preferring a piecemeal sale of assets.
A representative for the FDIC declined to comment. Piper Sandler did not respond to a request for comment.
--Harvard Zhang, Patrick Fitzgerald, Geoff Burrows