Goldman Sachs was the purchaser of the bond portfolio that Silicon Valley Bank booked a $1.8 billion loss on, setting SVB’s failure into motion.
SVB revealed the news on Tuesday.
The loss was the reason the technology-focused lender attempted a $2.25 billion stock sale last week using Goldman Sachs as an adviser.
The capital raise failed as depositors fled, and investors worried SVB would have needed even more capital.
SILICON VALLEY BANK COLLAPSE: HERE’S WHO BENEFITED FROM THEIR EXECUTIVE, PAC DONATIONS
The portfolio consisted mainly of U.S. Treasuries and had a book value of $23.97 billion, SVB said.
The transaction was carried out “at negotiated prices” and netted the bank $21.45 billion in proceeds.
Goldman Sachs’ purchase of the bond portfolio was handled by a division separate from the unit that handled SVB’s stock sale, according to a person familiar with the matter.
SILICON VALLEY BANK COMMITTED ‘ONE OF THE MOST ELEMENTARY ERRORS IN BANKING,’ LARRY SUMMERS SAYS
After 40 years, Silicon Valley Bank, the nation’s 17th largest, was shut down by the FDIC Friday as regulators moved to protect customers as it faced a liquidity crunch after losing $2 billion.
It became the largest bank failure since the financial crisis.
SIGNATURE BANK FACED CRIMINAL PROBE BEFORE FIRM’S COLLAPSE
Federal regulators on Sunday said New York-based Signature Bank was also being shut down to protect consumers and the financial system following the collapse of SVB.
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Founded in 2001, the New York-based Signature Bank was popular among crypto companies. The institution provided deposit services for its clients’ digital assets but did not make loans collateralized by them.
Reuters contributed to this report.
