US Federal Deposit Insurance coverage Corp. (FDIC) closed down Silicon Valley Financial institution final week after its share value plunged attributable to ongoing bond-market losses, triggering $42 billion of withdrawals.
From pv magazine USA
The FDIC put 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 obtainable account deposits of as much as $250,000. On the weekend, the US Federal Reserve said that each one deposits could be secured and obtainable to depositors on Monday morning.
Silicon Valley Financial institution’s $209 billion in property make its collapse the second-largest financial institution failure in US historical past. The financial institution’s challenges, a few of which have been recognized, accelerated when it introduced the sale of $21 billion of property at a 9% loss, as a way to be certain it might nonetheless 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 in New York, has additionally collapsed. It was additionally being managed by the Fed in an analogous method as Silicon Valley Financial institution.
Silicon Valley Financial institution’s web site acknowledged that it had a hand in financing 62% of community solar projects as of March 31, 2022. A Google search verifies a particular relationship.
pv journal USA has reached out to a number of neighborhood photo voltaic concerned corporations to get their reactions to those occasions. Over the weekend, publicly traded residential photo voltaic corporations similar to Sunrun and Sunnova Power issued statements on Silicon Valley Financial institution’s failure.
Sunrun said Silicon Valley Financial institution was a lender on two of its credit score amenities, however claimed that it accounted for lower than 15% of its whole hedging amenities. Sunrun stated doesn’t anticipate vital publicity. It does maintain money deposits with Silicon Valley Financial institution totaling almost $80 million, however the Fed has acknowledged that these are protected.
Sunnova stated its publicity to Silicon Valley Financial institution is negligible as a result of it doesn’t maintain money deposits or securities with the monetary group. Nonetheless, one in every of its subsidiaries is a part of a credit score facility the place SVB serves as a lender.
Stem, an power storage improvement firm, stated it estimates lower than 5% of money deposits and short-term investments might be affected by Silicon Valley Financial institution’s closure, however the firm doesn’t maintain any credit score amenities with the financial institution. Sunrun’s inventory misplaced 12.4% in worth since SVB’s collapse late final week, whereas Sunnova and Stem have been down 11.4% and 10.4% respectively.
