The US Federal Deposit Insurance coverage Corp. (FDIC) shut down Silicon Valley Financial institution final week after its share value plummeted because of 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 out there account deposits of as much as $250,000. Over the weekend, the US Federal Reserve mentioned that every one deposits can be secured and out there 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 might 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 group photo voltaic initiatives 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 Vitality 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 whole hedging facility. Sunrun mentioned it doesn’t anticipate vital publicity. It holds money deposits at Silicon Valley Financial institution value practically $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 every of its subsidiaries is a part of a credit score facility wherein SVB serves as a lender.
Stem, an power storage growth firm, mentioned it estimated that lower than 5% of money deposits and short-term investments could possibly 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 fell 11.4% and 10.4% respectively.
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