News Briefs: Failed Silicon Valley Bank Was One of Oak Street Health’s Lenders
Oak Street Health, Inc., which CVS Health Corp. plans to purchase for $10.6 billion, had a financial arrangement with the now-failed Silicon Valley Bank (SVB), according to an SEC filing. SVB is a lender under Oak Street’s $300 million term loan credit facility along with Hercules Capital Inc., and Oak Street has drawn down just $75 million of that so far. “Of the remaining undrawn $225 million, SVB was committed to providing $45 million,” the filing stated. “While the Hercules Capital portion of the term loan commitment is unaffected, it is unclear at this time whether and to what extent the Company will be able to draw upon SVB’s remaining portion of the term loan commitment.” SVB also provided Oak Street with commercial banking and treasury management services, but Oak Street “maintained less than a quarter of its cash, cash equivalents and marketable debt securities at SVB” and expected to be able to have full access to its funds as of March 13, thanks to the U.S. Treasury’s move to ensure all the bank’s depositors could do so. U.S. financial regulators shut down SVB — a banking partner for many venture capital firms that fund startups — on March 10 after a swift collapse precipitated by a bank run. It was the second-largest bank failure in U.S. history.