The Secretary of the Treasury, the Federal Reserve Board, and the Federal Deposit Insurance Corporation (FDIC) chairs have issued a joint statement to give comfort to the markets that they have approved actions designed to enable the FDIC to complete its resolution of Silicon Valley Bank (SVB) and Signature Bank of New York in a manner that fully protects depositors and makes available additional funding to eligible depository institutions to help banks maintain liquidity for all depositors. Nonetheless, we are not yet out of the woods.
Over the course of the last few days, we have worked with our clients to:
We worked with many of our clients to create short forms of unsecured promissory notes, subordination agreements, and related corporate approvals to raise capital from existing investors and new lenders to finance urgent payroll and other matters.
Given the announcement by U.S. government regulators, this situation is evolving rapidly, but we are standing by to jump into the void with our clients and address liquidity requirements in a very practical and commercial fashion.
Depending on the resolution of banks taken over by the FDIC, we expect that existing loan and security agreements, term loans, revolving loans, credit lines, and even credit cards and bank machine cards will need to be refinanced or replaced and alternative sources of credit sourced.
Many of our clients will consider treasury, cash, and risk management policies and strategies in light of their recent experiences.
Please reach out to members of the Bank Receivership Task Force or to your Foley relationship partner if we can provide assistance.