Think it’s just tech startups that are hit by the collapse of giant Silicon Valley Bank? Think again: the So-Fi Stadium Name. In this Zennie62Media, Inc. Breaking News Exclusive here at World News Media Network, Giant Silicon Valley Bank’s crash has not only harmed its tech startup clients, but also the home of the National Football League’s Los Angeles Rams and Los Angeles Chargers: So-Fi Stadium. That’s because the So-Fi fin tech organization has a naming rights agreement with L.A. Stadium and Entertainment District, the owner and operator of the LA Rams and LA Chargers’ home.
That So-Fi Naming Rights Agreement is reportedly at $625 million total to be paid annually over a $20 year period. How this matter of So-Fi Stadium becoming involved in the Silicon Valley Bank collapse is because So-Fi received a “risk rentention facility” from SVB in 2020. Here’s the press release:
SAN FRANCISCO, Calif. – November 19, 2020 – Silicon Valley Bank (SVB), the bank of the world’s most innovative companies and their investors, today announced that it has entered into a multi-million risk retention financing agreement with SoFi, the digital personal finance company. This agreement provides financing to be used for SoFi’s risk retention bonds as part of their asset-backed securities (ABS) issuance requirements.
“SVB truly understands the unique needs of innovative companies like SoFi,” said Chris Lapointe, CFO of SoFi. “As the ABS market is an important source of debt financing for SoFi, this committed revolving facility allows us to reduce risk at favorable terms.”
SVB’s specialty finance group provides revolving lines of credit and term loans to companies and funds active in the consumer and enterprise sectors. The specialty finance team has deep, proven expertise providing custom credit solutions such as warehouse facilities.
“We are pleased to offer this tailored financing solution to SoFi, and other fintech companies, to enable greater flexibility as they focus on their core mission of helping individuals achieve financial independence,” said Nick Christian, Head of Specialty Finance at Silicon Valley Bank. “SoFi is a leader in the personal finance space, and we are proud to expand our relationship with the team.”
Silicon Valley Bank’s Death Due To High Interest Rates Pushed By Fed Chair
Fed Chairman Jay Powell’s jacking up interest-rates in the middle of a weak economy caused higher costs to borrow money at a time when loans were needed to compensate for downturns in overall revenue generation. Silicon Valley Bank’s tech corporate customers drew down more money or just plain laid off employees, or in some cases folded. Then, Silicon Valley Bank announced it was going to sell securities at a loss of $1.8 billion which sends the signal that it doesn’t have enough in deposits to cover its liabilities, and that it would also sell $2.25 billion in new shares to shore up its balance sheet. Venture Capital customers of Silicon Valley Bank realized the hand-writing on the wall and started to pull their money. And that led to the collapse of Silicon Valley Bank, the 15th largest financial institution in America, and arguably the financial hearblood of America’s Tech Industry.
Will So-Fi Pull Out Of Its $625 Million Stadium Naming Rights Deal?
So what will So-Fi do now, and to what extent are they harmed financially because of SVB and So-Fi Stadium naming rights? SVB’s demise damages SoFi’s line-of-credit deal, so a cold read of the situation points to the organization having to consider clawing back money it spends for marketing. It would come as a shock if the So-Fi naming rights agreement wasn’t already up for consideration as a casualty of the SVB death’s impact on So-Fi’s finances.
Stay tuned.