Brilliant Earth, which had a credit agreement and loan facility with Silicon Valley Bank (SVB), is “monitoring” events following the bank’s closure, it reported in its March 22 10-K filed with the Securities and Exchange Commission.
After SVB failed on March 10—following a “bank run” fueled by vocal venture capitalists—the Federal Deposit Insurance Corporation (FDIC) established Silicon Valley Bridge Bank to assume SVB’s deposits and obligations.
“Although the FDIC has announced that the Bridge Bank will perform all contractual obligations of SVB, [Brilliant Earth] continues to monitor developments, including additional announcements from regulatory authorities, that could impact [its] SVB credit facilities,” the company said.
In a statement received after this article was published, Brilliant Earth said it “has a strong balance sheet with no net debt. The recent events at SVB have had no material impact on our operations.”
The company’s filing noted that Brilliant Earth has $200,000 stored in deposit accounts in the new version of SVB—which is under the $250,000 threshold insured by the FDIC. (That doesn’t necessarily matter in this case, as the FDIC said it will insure deposits that exceed that threshold.)
“The company does not anticipate any losses with respect to its funds deposited with SVB or the Bridge Bank,” it said. “Although the FDIC has announced that the Bridge Bank will perform all contractual obligations of SVB, the company continues to monitor developments.”
In Brilliant Earth’s recent conference call, chief financial officer Jeffrey Kuo said, “We have historically diversified, and expect to continue maintaining, our cash holdings across multiple financial institutions.”
However, the San Francisco-based e-tailer’s 10-K also noted that the company’s “deposits at certain [financial] institutions exceed insured limits.”
Brilliant Earth entered into a credit agreement with Silicon Valley Bank in May 2022. It provides for a secured term loan credit facility of $65 million, and a secured revolving credit facility of up to $40 million. The credit facilities mature on May 24, 2027.
As of December 31, 2022, there were no amounts outstanding under the SVB revolving credit facility, and $63.4 million of total debt outstanding under the SVB term loan facility, of which $60.1 million is classified as long-term debt.
On March 20, the FDIC said it’s seeking a new owner of the Bridge Bank, and it hopes the bidding process will conclude later this week.
This article has been updated with a comment from Brilliant Earth.
Credit: Getty Images/Sundry Photography
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