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In other SVB-related news, the Financial Group, which was the holding company of SVB, is exploring ways to sell off its other units.
Private equity company Apollo Global Management is reportedly interested in the book of loans held by the now-collapsed Silicon Valley Bank (SVB). The bank has made several headlines over the past week due to its debacle that affected the entire US banking sector. Regulators have taken over SVB, and investors, including Apollo, have started eyeing the company.
Apollo among Suitors Seeking to Buy Pieces of SVB
According to people familiar with the matter, Apollo is looking to buy pieces of SVB. The sources revealed that the asset manager is eyeing the bank’s book of loans. As of the 31st of December, 2022, the financial institution had $73.6 billion of loans. While SVB had billions of dollars of loans as of the end of 2022, there is currently no information on the specific size of the loan book Apollo is interested in.
In addition, the bank had over $175 billion in mostly uninsured deposits and $209 in total assets. These assets were long-term bonds that SVB was forced to sell at a loss amid rising interest rates. Other assets attributed to SVB are loans to early-stage and growth companies. More include credit for wealthy entrepreneurs and VC funds.
Over the week, the Federal Deposit Insurance Corporation (FDIC) conducted but there was no buyer. Now, the regulator has created a bridge bank to accommodate SVB’s deposits.
In other SVB-related news, the Financial Group, which was the holding company of SVB, is exploring ways to sell off its other units. Investment banking company JPMorgan Chase & Co (NYSE: JPM) has started acquisition discussions with the parent company. Sources who pleaded anonymity stated that the ongoing agreement excludes SVB, which is now under US control.
As SVB crumbles and investors, such as Apollo, eyepieces of the company, many are beginning to believe that no firm is too big to fail. This has also affected the United States stock futures. The US stock market, with futures tied to the Dow Jones Industrial Average (INDEXDJX:.DJI), plunged 276 points on Monday. Futures linked to the S&P 500 Index also fell 1%, while the Nasdaq-100 lost 0.7%.
As a result of uncertainty and fears in the market, the Federal Reserve, the Treasury Department, and the FDIC released a joint statement. According to them, while SVB equity holders do not have a bailout, depositors will have access to their funds. The statement reads:
“Today we are taking decisive action to protect the US economy by strengthening public confidence in our banking system.”
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