m22au's journal

m22au said:
The four bank stocks that look most likely to suffer from SIVB contagion are PACW WAL FRC SBNY
https://finance.yahoo.com/quotes/sivb,kre,pacw,wal,frc,sbny/view/v1

Then the next riskiest might be CUBI and FFWM (listed in previous post)
and MCB was down 14% on Friday
https://finance.yahoo.com/quotes/cubi,ffwm,mcb/view/v1
More...

Update: SBNY has failed
https://www.dfs.ny.gov/reports_and_publications/press_releases/pr20230312
"Superintendent Adrienne A. Harris announced today that the New York Department of Financial Services (DFS) has taken possession of Signature Bank, pursuant to Section 606 of New York Banking Law, in order to protect depositors. DFS appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of the bank. "

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm
 
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Joint Statement by Treasury, Federal Reserve, and FDIC
Department of the Treasury
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
March 12, 2023
For release at 6:15 p.m. EDT
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

https://www.fdic.gov/news/press-releases/2023/pr23017.html

Main points:

"Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

"We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole."
 
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Moody’s Puts First Republic, Five US Banks on Downgrade Watch
https://finance.yahoo.com/news/moody-puts-first-republic-five-042625345.html

The six banks are FRC WAL ZION CMA UMBF and Intrust Financial

https://finance.yahoo.com/quotes/kre,frc,wal,zion,cma,umbf/view/v1

https://www.moodys.com/research/Moo...ratings-under-review-for-downgrade--PR_474733
https://www.moodys.com/research/Moo...es-ratings-on-review-for-downgrade--PR_474727
https://www.moodys.com/research/Moo...ratings-under-review-for-downgrade--PR_474728
https://www.moodys.com/research/Moo...ds-ratings-on-review-for-downgrade--PR_474754
https://www.moodys.com/research/Moo...ratings-under-review-for-downgrade--PR_474753

Interesting to note, not just because of the bad PR for these banks, but also because one possible reason why SIVB sold its securities at a loss was because of the threat of a downgrade to its credit rating

Silicon Valley Bank's demise began with downgrade threat
https://www.reuters.com/markets/us/...gan-with-downgrade-threat-sources-2023-03-11/

SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic
https://www.bloomberg.com/news/arti...ails-after-unthinkable-heresy-becomes-reality

and the actual rating downgrade on March 8

https://www.moodys.com/research/Moo...l-senior-unsecured-to-Baa1-from-A3--PR_474590
 
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FRC

https://news.firstrepublic.com/newsroom

Sunday March 12 announcement
"First Republic Bank Strengthens and Diversifies Liquidity"
https://news.firstrepublic.com/news...ic-bank-strengthens-and-diversifies-liquidity

Thursday March 16 announcement (various things including $30 billion deposit)
"Reinforcing Confidence in First Republic Bank"
https://news.firstrepublic.com/news...ls/reinforcing-confidence-first-republic-bank

The $30 billion deposit has "an initial term of 120 days at market rates"
https://www.timeanddate.com/date/dateadd.html
16 March + 120 days = 14 July
end of term is therefore Friday July 14, 2023.

https://ir.firstrepublic.com/filings

10-k filed on February 28, 2023
The number of shares outstanding of the Bank’s common stock, par value $0.01 per share, as of February 13, 2023 was 186,218,729
 
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https://www.credit-suisse.com/about-us/en/investor-relations/investor-news.html
https://www.credit-suisse.com/about...es/credit-suisse-and-ubs-to-merge-202303.html

All shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse as merger consideration. This exchange ratio reflects a merger consideration of CHF 3 billion for all shares in Credit Suisse.

1 / 22.48 = 0.0444839857651246

Based on UBS closing price of 17.11 CHF, CS shareholders will receive 0.7611 CHF in value
(17.11 * 0.0444839857651246 = 0.7611)

Calculation confirmed by UBS press release

https://www.ubs.com/global/en/investor-relations.html
https://www.ubs.com/global/en/media/display-page-ndp/en-20230319-tree.html

"Under the terms of the all-share transaction, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF 0.76/share for a total consideration of CHF 3 billion."

***

CS confirms shareholders will get 3bn and AT1 holders 0. This won't go down very well as it's an obvious breach of the hierarchy of claims
https://twitter dot com/Discobanker/status/1637562462537936896

***

"Why $17 Billion in Credit Suisse ‘CoCos’ Got Wiped Out in UBS Takeover"
https://www.washingtonpost.com/busi...5ef2fe-c69c-11ed-9cc5-a58a4f6d84cd_story.html

"The decision to ignore market convention — that shareholders are the first to take a hit before AT1 bonds face losses — could prove to be a huge blow to the $275 billion AT1 market and raises serious doubts about the prospects for other lenders’ CoCos."

"Credit Suisse says $17 billion debt worthless, angering bondholders"
https://www.reuters.com/business/fi...7-bln-bonds-zero-angering-holders-2023-03-19/

keywords: AT1 Coco coco contingent convertible bond contingent convertible bonds
 
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