• SVB Financial Group announced filing for a „court-supervised reorganization under Chapter 11“.
• The struggling tech-supporting bank’s shares were halted and the FDIC had to intervene.
• Bitcoin soared to $27,000 as news came out.
SVB Financial Group Files for Bankruptcy Protection
The California-based SVB Financial Group has officially announced filing for a „court-supervised reorganization under Chapter 11“ following its shares being halted and the FDIC intervening. This comes amid Bitcoin’s latest price surge, pushing it up to $27,000.
Liquidity and Debt Details
According to SVB Financial Group, it has $2.2 billion of liquidity as well as additional cash and interests in SVB Capital and SVB Securities which will be used to explore “strategic alternatives”. Its debt is believed to be $3.3 billion in aggregate principal amount of unsecured notes only recourse to SVB Financial Group.
What Funds Were Not Included?
The funds of SVB Securities and SVB Capital, as well as general partner entities, were not included in the Chapter 11 filing and are continuing to operate „in the ordinary course“. Additionally, Silicon Valley Bank (SVB) was no longer affiliated with Silicon Valley Bridge Bank (N.A.), or its private banking/wealth management business – both were excluded from the bankruptcy filing process.
Strategic Alternatives Explored
As part of its strategic alternatives exploration process, SVB Financial Group has filed an agreement with creditors that would provide $1 billion in debtor-in-possession financing upon approval by the court overseeing the case. The FinTech company also intends to access an additional $400 million term loan facility subject to certain conditions being met by all parties involved in this case.
To conclude, while Bitcoin soared past $27K amidst this news coming out; it remains unclear whether these changes will have any effect on BTC’s price going forward or on how long the Chapter 11 proceedings will last for the California-based bank – however one thing is certain: prior agreements are now void due to this new development taking place at SVB Financial Group..