Hedge funds offering to buy startup deposits stuck at Silicon Valley Bank -Semafor

March 11 (Reuters) – Hedge funds are providing to purchase startup deposits stranded at Silicon Valley Financial institution (SVB) for as little as 60 cents on the greenback, Semafor reported on Saturday, citing individuals accustomed to the matter.

Bids vary from 60 to 80 cents on the greenback, the report mentioned including that the vary displays expectations for the way a lot of the uninsured deposits might be ultimately recovered as soon as the financial institution’s belongings are bought or wound down.

Companies like Oaktree that are identified for investing in distressed debt are reaching out to startups after SVB’s seizure by the Federal Deposit Insurance coverage Corp (FDIC), the report mentioned.

Merchants from funding agency Jefferies are additionally contacting startup founders with cash caught on the financial institution, providing to purchase their deposit claims at a reduction, The Data reported individually.

Jefferies is providing at the very least 70 cents on the greenback for deposit claims, the report mentioned, citing a number of individuals with direct data of the matter.

Oaktree didn’t instantly reply to a Reuters request for remark. Jefferies couldn’t be instantly reached.

Silicon Valley Financial institution imploded after depositors, involved in regards to the lender’s monetary well being, rushed to withdraw their deposits. The frenetic two-day run on the financial institution blindsided observers and shocked markets, wiping out greater than $100 billion in market worth for U.S. banks.

Reporting by Kanjyik Ghosh in Bengaluru; Extra reporting by Akanksha Khushi; enhancing by Grant McCool

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