SVB fallout: Apollo, Blackstone, KKR eye US biz for $74-bn loan book

HSBC to inject over $2 bn into SVB Uk unit; Moody's puts First Republic, 5 US banks on downgrade watch

Apollo Global Management, Blackstone, and KKR & Co, among others, have expressed interest in snapping up a book of loans held by Silicon Valley Bank, the California lender seized by federal regulators last week, people with knowledge of the matter said.

The bank had $73.6 billion of loans as of December 31, 2022. The size of the loan book Apollo, Blackstone and KKR are interested in couldn’t immediately be determined. Blackstone is also looking at other assets it may purchase from the bank, one of the people said. 

HSBC, meanwhile, said it was planning to inject £2 billion ($2.4 billion) of liquidity into Silicon Valley Bank’s UK division, a move capping a frenzied weekend of talks that saw Europe’s largest lender take ownership of the stricken subsidiary. 

The dramatic collapse of Silicon Valley Bank and the market turmoil it unleashed is part of the “battle between fire and ice” in global efforts to curb inflation after years of cheap money, Morgan Stanley Co-President Ted Pick said on Tuesday.

Moody’s Investors Service placed First Republic Bank and five other US lenders on review for downgrade, the latest sign of concern over the health of regional financial firms following the collapse of Silicon Valley Bank.

Western Alliance Bancorp., Intrust Financial Corp., UMB Financial Corp., Zions Bancorp. and Comerica Inc. were the other lenders put on review by Moody’s. The credit rating company cited concerns over the lenders’ reliance on uninsured deposit funding and unrealised losses in their asset portfolios. 

A class action lawsuit is being filed against the parent company of Silicon Valley Bank, its CEO and its chief financial officer, saying that company didn't disclose the risks that future interest rate increases would have on its business.