The U.S. banking regulator has kicked off the sale of Silicon Valley Bank’s collapsed German operations, targeting bids by July 19 for its $460 million portfolio of loans, leases and other assets.
Details of the sale were disclosed in marketing materials sent to major investors in recent days by First Financial Network, the loan specialist handling the sale on behalf of the Federal Deposit Insurance Corporation. The FDIC, which confirmed the sale process, seized SVB on March 10 following a catastrophic deposit run at the California-based bank.
SVB collapsed after it became known that it had suffered huge losses on its securities portfolio. The bankruptcy, which has been blamed on a combination of poor risk management, failing supervision and rising interest rates, sparked a wave of unrest and deposit outflows at other regional banks. That mortally wounded Signature Bank, then First Republic, which was seized by the FDIC and sold to JPMorgan Chase on May 1.
SVB’s UK subsidiary was sold to HSBC for £1 the same weekend the parent company went bankrupt, and most of the US business was sold to First Citizens at the end of March. But the German company, operating as an affiliate, remained with the FDIC.
The regulator plans to open a data room at the German facility for eligible bidders on June 20.
Bidders must be authorized to borrow on the German market, the marketing materials said. This can be a bank with a license to operate in Germany, the countries of the EU and the European Economic Area, or a non-EEA recognized bank with a German branch.
The assets include loan balances of $460 million and commitments for an additional $494 million in loans “as well as other assets in Frankfurt and Berlin”.
The regulator separately hired BlackRock to sell $114 billion in securities it inherited from SVB and Signature, which closed on the same weekend as SVB.
An FDIC spokesman said the sale is the latest step in its efforts to resolve the bankrupt bank in an “orderly and gradual manner”.
First Financial Network declined to comment.