Important Information for Counterparties of SVB/SVBBNA

2 minute read | March.14.2023

SVB/SVBBNA Has Assumed SVB’s Loans, Contracts and Other Commitments

On March 14, 2023, the FDIC issued a statement stating that they have transferred to Silicon Valley Bridge Bank, National Association (SVBBNA) substantially all third party contracts previously entered into by Silicon Valley Bank (SVB) and SVBBNA has assumed all obligations of SVB under those contracts. As support for SVBBNA, the FDIC further stated that “All obligations of SVBBNA are backed by the FDIC and the full faith and credit of the U.S. government.”

As a consequence, SVBBNA, as successor to SVB may:

  • Enforce all of the terms of SVB’s contracts;
  • Make timely payments to vendors and other counterparties;
  • Perform obligations under the assumed contracts; and
  • Commence legal actions against counterparties who fail to perform their obligations under the assumed contract with SVBBNA.

The FDIC further indicated that it would be marketing SVBBNA to potential investors.

In a letter targeted to customers, counterparties and vendors, the FDIC provided the following practical guidance:

  • All SVB authorized signers, account details, wire / ACH instructions, and pre-failure processes remain in effect, and can and should be utilized to provide such services, until such time as SVB notifies you.
  • Vendors and counterparties to SVB should be aware that the receiver is authorized to enforce such contracts, and to transfer the contract notwithstanding any limits on transfer contained in the contract.
    • Accordingly, vendors and counterparties with contracts with SVB are legally obligated to continue to perform under the contract, and SVBBNA is obligated to and has the full ability to make timely payments to vendors and counterparties and otherwise perform its obligations under the contract.

Counterparties should note:

  • Counterparties under the assumed contracts with SVBBNA cannot modify or terminate contracts with SVBBNA based on the insolvency of SVB or appointment of FDIC as receiver of SVB, and contractual provisions that provide for termination or modification based on SVB’s insolvency or appointment of a receiver are unenforceable.

SVBBNA also issued a further statement confirming that SVBBNA has assumed all obligations and commitments of former SVB including:

  • SVBBNA has assumed all loan positions of SVB, whether as lender, issuing bank, administrative agent or any similar function that was formerly performed by SVB.
  • SVBBNA will honor all commitments to advance under existing credit agreements in accordance with and pursuant to the terms thereof.
  • SVBBNA will perform all other duties or roles under existing credit agreements in accordance with and pursuant to the terms thereof.
  • All counterparties of former SVB may transact with, settle transactions, and otherwise conduct business with SVBBNA.

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