Highlights

Counterparties should continue to follow their current contractual obligations

Silicon Valley Bank’s parent company bankruptcy filing will not impact contractual rights

Counterparties should be vigilant and consider alternate financing arrangements

Usual Luxembourg security package

Luxembourg is one of the leading domiciles worldwide for international investment portfolio acquisition vehicles.

Acquisition financing are usually secured against the assets and cash flows of the target company as well as of the buyout vehicle.

In practice, given that a Luxembourg holding company generally does not have any operational activities, shares, receivables and cash on bank are the most important assets to cover.