S&P rates Silicon Valley Bancshares debt

Standard & Poor's said it assigned its BBB- long-term counterparty credit and BB+ subordinated debt ratings to Silicon Valley Bancshares and its BBB counterparty credit rating to Silicon's principal operating subsidiary, Silicon Valley Bank.

The outlook for both entities is stable.

"Silicon's ratings reflect its concentrated business profile and relatively solid performance, especially given the recent economic and equity market downturns that its targeted markets experienced over the past several years," said S&P credit analyst Michael Driscoll.

S&P said Silicon operates with a unique credit risk loan profile due to its strong niche position of lending to technology, life science, and premium wineries, and its extensive counterparty relationships within the venture capital community.

Silicon's credit profile includes its excellent deposit funding and liquidity, improving asset quality, weakened capital ratios from share buybacks, inconsistent earnings, and higher expense base. With the past several years' aggressive capital management offsetting the prospect for improving profitability, Silicon's outlook is stable. The outlook also incorporates S&P's belief that capital metrics have stabilized and that double leverage will continue to decrease.

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