The US Federal Deposit Insurance coverage Corp. (FDIC) shut down Silicon Valley Financial institution final week after its share worth plummeted attributable to continued losses within the bond market, triggering $42 billion in withdrawals.
From pv journal USA
The FDIC positioned Silicon Valley Financial institution into receivership final week and created a brand new financial institution – Deposit Insurance coverage Nationwide Financial institution of Santa Clara – with accessible account deposits of as much as $250,000. Over the weekend, the US Federal Reserve mentioned that every one deposits could be secured and accessible to depositors on Monday morning.
Silicon Valley Financial institution’s $209 billion in property made its collapse the second-largest financial institution failure in US historical past. The financial institution’s challenges, a few of that are well-known, had been accelerated when it introduced the sale of $21 billion in property at a 9% loss, to make sure it may cowl all property.
This prompted a number of enterprise teams to shortly withdraw $42 billion in property, together with Peter Thiel’s Founders Fund. A second financial institution, Signature Financial institution of New York, additionally collapsed. The Fed additionally manages it in the identical approach as Silicon Valley Financial institution.
Silicon Valley Financial institution’s web site says it has a hand in financing 62% of neighborhood photo voltaic tasks as of March 31, 2022. A Google search confirms a particular relationship.
pv journal USA reached out to a number of firms concerned in photo voltaic in the neighborhood to get their reactions to those occasions. Over the weekend, publicly traded residential photo voltaic firms like Sunrun and Sunnova Power issued chapter statements to Silicon Valley Financial institution.
Sunrun mentioned Silicon Valley Financial institution was a lender on two of its credit score amenities, however admitted it accounted for lower than 15% of the overall hedging facility. Sunrun mentioned it doesn’t count on important publicity. It holds money deposits at Silicon Valley Financial institution value almost $80 million, however the Fed says it’s protected.
Sunnova mentioned its publicity to Silicon Valley Financial institution is minimal as a result of it doesn’t maintain money deposits or securities within the monetary group. Nevertheless, one in all its subsidiaries is a part of a credit score facility during which SVB serves as a lender.
Stem, an vitality storage growth firm, mentioned it estimated that lower than 5% of money deposits and short-term investments may very well be affected by the closure of Silicon Valley Financial institution, however the firm didn’t maintain even which financial institution credit score facility. Sunrun inventory has misplaced 12.4% of its worth because the collapse of SVB late final week, whereas Sunnova and Stem are down 11.4% and 10.4% respectively.
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