BlackRock Inc. was hired to help U.S. government to manage the sale of 114,000 million dollars in instruments held by bankrupt banks Signature Bank and Silicon Valley Bank.
(See: First Citizens bought Silicon Valley: details of the operation).
The asset management firm will carry out the sales of $27 billion in Signature securities and 87,000 million dollars in instruments Silicon Valley Bank of SVB Financial Group, informed the Federal Deposit Insurance Corporation (FDIC, for its acronym in English).
The holdings are mostly securities backed by agency mortgages, collateralized mortgage obligations and commercial mortgage-backed instruments, the FDIC said.
sales “will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market performance by taking into account daily liquidity and trading conditionsthe agency said.
(See: The world banking situation is moving away from a possible crisis).
A BlackRock spokesman declined to comment.
The company led by Larry Fink has a track record of managing distressed debt for the US authorities.
Behind the 2008 Financial Crisis, the Federal Reserve and the Treasury Department awarded contracts to BlackRock to manage $130 billion of bad debt previously on the books of investment bank Bear Stearns Cos. and American International Group Inc.
(See: How Credit Suisse’s fall has damaged Switzerland’s reputation).
BlackRock was also one of four co-managers of a Federal Reserve program to purchase more than $1 trillion in residential mortgage-backed securities at the time.
SVB Financial Group’s Signature and Silicon Valley Bank were among the top three US banks to they collapsed in March 2023 due to deposit withdrawals.
(See: The IMF alert: uncertainty due to the banking crisis is high).
Bloomberg
