Ten Business Days to Replace a Letter of Credit After Its Bank Is Downgraded
Four executed leases filed with the SEC set a different standard for which bank may issue the tenant's letter of credit, and the standard is the whole security. Nkarta's landlord approved Silicon Valley Bank in November 2021 regardless of whether it met the rating threshold then or ever, 490 days before SVB failed, then wrote a hard S&P A- and Moody's A3 floor back into the lease 46 days after it did. Immunome's lease gives the tenant ten business days to produce a substitute if the bank's rating slips, with no notice, cure or grace period, and ten days plus a cash bridge plus sixty days if the FDIC appoints a receiver. Surrozen's landlord requires an issuer on the Financial Stability Board's list of 29 global systemically important banks, frozen as of 1 October 2024, and disqualifies any bridge bank or successor to a failed issuer. That exclusion would rule out First Citizens Bank, which holds Sangamo Therapeutics' $1,500,000 letter of credit, numbered SVBFS002492, drawn to zero to cover three months of rent and due to be restored by 31 December 2026, six days before $5,055,869.27 of deferred rent comes due.