The Failure of SVB and Signature Bank Has Little Impact on Oil & Gas and Pipeline Issuers
The failure of SVB Financial Group (SVB) in California happened suddenly, amounting to the largest bank failure in the U.S. since the 2008–09 financial crisis. In addition, Signature Bank, a New York-based bank has also failed recently. Regulators have stepped in to provide additional liquidity to support the banking system by backstopping deposits in these two failed banks above the Federal Deposit Insurance Corporation's insured limits. Investors now are trying to determine if these bank failures will spill over and potentially affect other financial institutions as well as other business sectors such as the oil and gas and pipeline industries. We have reached out to a number of our rated issuers in these two industries to assess their exposure to the failure of SVB or Signature Bank as well as address the implications on their businesses if there is possible contagion in the banking sector. For those companies that we contacted, they indicated no to minimal exposure to SVB or Signature Bank and believed the potential impact from contagion would not likely affect their businesses materially.
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