Hedge funds offering to buy startup deposits stuck at Silicon Valley Bank -Semafor

(Reuters) -Hedge funds are offering to buy startup deposits stranded at Silicon Valley Bank (SVB) for as little as 60 cents on the dollar, Semafor reported on Saturday, citing people familiar with the matter.

Bids range from 60 to 80 cents on the dollar, the report said adding that the range reflects expectations for how much of the uninsured deposits will be eventually recovered once the bank’s assets are sold or wound down.

Firms like Oaktree which are known for investing in distressed debt are reaching out to startups after SVB’s seizure by the Federal Deposit Insurance Corp (FDIC), the report said.

Oaktree did not immediately respond to a Reuters request for comment.

Silicon Valley Bank imploded after depositors, concerned about the lender’s financial health, rushed to withdraw their deposits. The frenetic two-day run on the bank blindsided observers and stunned markets, wiping out more than $100 billion in market value for U.S. banks.