Alternative lenders and hedge funds are swooping in to pick up deposits at 70c on the dollar.
We can picture politicians and central banks in US, Britain, Europe and Canada working the midnight shift to pull together a solution and successfully take over the liabilities of SVB and close the FDIC file asap and before next week’s market open.
Oaktree is among hedge funds that have offered to buy the deposits, with bids ranging from 60 cents to 80 cents on the dollar, Semafor said, citing people familiar with the matter. The bids reflect a range of expectations for how much of the uninsured deposits will ultimately be recovered once the bank’s assets are sold or wound down, according to the report.
Separately, the Information reported that traders from Jefferies are contacting startup founders and offering to buy their deposit claims. The lender has offered at least 70 cents on the dollar, one person said.
Silicon Valley Bank is the single most critical financial institution to the tech industry and its collapse has left startups particularly exposed. The US Federal Deposit Insurance Corp. only insures deposits up to $250,000 and more than 93% of SVB’s domestic deposits were uninsured at the end of last year, the bank has said in a filing.
Bankwatch 