Moody’s slashes SVB

Moody’s Investors Service said it downgraded the ratings of SVB Financial Group and its bank subsidiary, Silicon Valley Bank to C from Baa1. The agency revised the outlook on the bank’s long-term issuer rating to stable from negative but changed SVB’s outlook to stable from negative.

Additionally, Moody’s lowered SVB's senior unsecured shelf and subordinated shelf ratings to (P)C from (P)Baa1 and the preferred stock non-cumulative and preferred shelf non-cumulative ratings to C (hyb) from Baa3 (hyb) and (P)C from (P)Baa3, respectively.

“The downgrades follow the closing of Silicon Valley Bank by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corp. (FDIC) as receiver. The closure of the bank follows Silicon Valley Bank's public announcement of a plan to restructure its balance sheet. The bank announced it had sold its available-for-sale securities at a $1.8 billion loss. However, the bank did not complete the planned capital raise associated with its balance sheet restructuring plan,” Moody’s said in a press release.

The agency said it plans to withdraw its ratings and outlooks on both entities.

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