Goldman Sachs (GS) is likely to make more than $100 million for purchasing a portfolio of securities with a book value of $23.97 billion from Silicon Valley Bank last week before the bank was shut down from regulators.
In exchange for purchasing the $21.4 billion in securities from the now defunct bank, which the lender booked at a loss of $1.8 billion on, Goldman is expected to make more than $100 million, according to a NYT Dealbook report. Goldman Sachs was also acting as an adviser to Silicon Valley Bank as it tried to raise capital at the last minute.
SVB Financial (NASDAQ:SIVB) first disclosed last Wednesday that it sold substantially all of its available for sale (AFS) securities portfolio, resulting in an after-tax loss of ~$1.38B in Q1, and planned to offer $1.25B of stock and $500M of preferred depositary shares in public offerings, moves intended to boost the company's liquidity at the time.
Those disclosures helped sparked a 60% plunge in shares of SIVB Financial on Thursday, followed by another stock drop on Friday before the FDIC took over the bank.