- The California Department of Financial Protection and Innovation has announced that it took possession of Silicon Valley Bank and appointed the FDIC as receiver.
- At the time of closing, the FDIC immediately transferred all insured deposits of Silicon Valley Bank to the newly created Deposit Insurance National Bank of Santa Clara.
- We expect SVB Financial Group to enter bankruptcy.
- We lowered our issuer credit rating on Silicon Valley Bank to 'D' from 'BBB' and our issuer credit rating on SVB Financial Group to 'CC' from 'BBB-'. We subsequently withdrew the ratings.
On March 10, 2023, S&P Global Ratings lowered its issuer credit rating on Silicon Valley Bank to 'D' from 'BBB'. We also lowered our issuer credit rating on SVB Financial Group, the non-operating holding company of Silicon Valley Bank, to 'CC' from 'BBB-'. The outlook on SVB Financial Group is negative following the regulatory closure of its primary operating subsidiary. In addition, we lowered our rating on SVB Financial Group's senior unsecured debt to 'CC' from 'BBB-' and the rating on the preferred stock to 'C' from 'BB-'.
Subsequent to the downgrades, we withdrew the issuer credit ratings on both entities and the issue ratings on SVB Financial Group.
We lowered our issuer credit rating on Silicon Valley Bank to 'D' following the announcement from the California Department of Financial Protection and Innovation that it took possession of the bank and appointed the Federal Deposit Insurance Corp. (FDIC) as receiver. At the time of closing, the FDIC immediately transferred all insured deposits of Silicon Valley Bank to the newly created Deposit Insurance National Bank of Santa Clara.
We expect SVB Financial Group to enter bankruptcy. The 'CC' rating is used when a default has not yet occurred but we expect default to be a virtual certainty, regardless of the anticipated time to default. In addition, the 'C' rating is used when an obligation is highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared with obligations that are rated higher.
- General Criteria: Hybrid Capital: Methodology And Assumptions, March 2, 2022
- Criteria | Financial Institutions | Banks: Banking Industry Country Risk Assessment Methodology And Assumptions, Dec. 9, 2021
- Criteria | Financial Institutions | General: Financial Institutions Rating Methodology, Dec. 9, 2021
- General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021
- General Criteria: Group Rating Methodology, July 1, 2019
- Criteria | Financial Institutions | General: Risk-Adjusted Capital Framework Methodology, July 20, 2017
- General Criteria: Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings, Oct. 1, 2012
- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
SVB Financial Group
|Issuer Credit Rating||CC/Negative/--||BBB-/Negative/--|
SVB Financial Group
|Downgraded; Outlook Action|
Silicon Valley Bank
|Issuer Credit Rating||D/--||BBB/Negative/--|
SVB Financial Group
|Issuer Credit Rating||NR/NR||CC/Negative/--|
SVB Financial Group
Silicon Valley Bank
|Issuer Credit Rating||NR/NR||D/--|
Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.
|Primary Credit Analyst:||Nicholas J Wetzel, CFA, Englewood + 303-721-4448;|
|Secondary Contact:||Rian M Pressman, CFA, New York + 1 (212) 438 2574;|
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