Funds managed by UBS Group face exposure exceeding $US500 million ($758.3 million) to First Brands Group, the bankrupt auto-parts supplier. This exposure stems from various investment strategies, with one fund positioned as the largest unsecured creditor, according to court documents. First Brands Group filed for Chapter 11 protection in Texas following an unsuccessful attempt to refinance $US6 billion in loans and creditor apprehension regarding the company’s use of off-balance-sheet financing.
UBS Hedge Fund Solutions holds the largest unsecured claim at $US233.7 million for supply chain financing. O’Connor, a hedge fund business recently slated for sale to Cantor Fitzgerald by UBS, possesses a similar claim valued at $US116.1 million. A board committee established as part of the bankruptcy proceedings is investigating First Brands’ use of that off-balance sheet funding.
UBS Asset Management has secured claims for more than $US160 million, encompassing holdings linked to term loans and a sidecar facility, which was implemented in June to attract funds from private credit providers. First Brands Group is an auto-parts supplier that distributes products to the aftermarket and original equipment manufacturers. UBS Group AG provides diversified financial services.
UBS Asset Management is also part of a group of secured lenders supplying First Brands with $US1.1 billion in debtor-in-possession financing. This bankruptcy loan aims to sustain the company’s operations throughout the court proceedings.
