Finance
UBS examines hit to funds from $500 million First Brands exposure
Published by Global Banking & Finance Review®
Posted on October 8, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 8, 2025
2 min readLast updated: January 21, 2026
UBS examines its $500M exposure to First Brands' bankruptcy, affecting investment funds and raising concerns in corporate debt markets.
ZURICH (Reuters) -UBS said on Wednesday it was examining the impact of the bankruptcy of First Brands on several of its investment funds, with the Swiss bank exposed to the tune of more than $500 million to the collapsed U.S. auto parts supplier.
Switzerland's biggest lender has exposure to First Brands debt and through supply chain finance agreements, spread across funds including at least one managed by its O'Connor hedge fund unit, according to court filings in the United States.
First Brands filed for bankruptcy protection last week after its lenders began investigating irregularities in the company's financial reporting. The company has $11.6 billion in total liabilities, according to the court documents.
Its collapse has unnerved debt investors and stoked fears of broader stress in corporate debt markets, and especially about growing risks in private credit where lending activity has soared in recent years.
U.S. bank Jefferies disclosed on Wednesday that it had a $715 million exposure to First Brands through a fund.
"This event affects many private credit and working capital providers across the industry," UBS said in a statement.
"In this highly fluid situation, we are working to determine the potential performance impact on the small number of our affected funds and are focused on protecting the interests of our clients."
While the economic fallout would be small for a bank of UBS's size, one analyst, asking not to be named, said the exposure was "not ideal for UBS's image and political perception" at a time when the lender was trying to persuade Swiss politicians to soften capital rules designed to make Swiss banking safer.
(Reporting by Oliver Hirt. Writing by Tommy Reggiori Wilkes. Editing by Mark Potter)
Bankruptcy is a legal process through which individuals or businesses that cannot repay their debts can seek relief from some or all of their obligations. It allows for the reorganization of debts or liquidation of assets.
Investment funds are pooled resources from multiple investors used to purchase a diversified portfolio of assets, such as stocks, bonds, or real estate. They are managed by professional fund managers.
Supply chain finance is a set of technology-based solutions that provide short-term credit to optimize working capital for both buyers and suppliers. It helps improve cash flow and reduce financing costs.
Private credit risks refer to the potential financial losses that lenders face when providing loans to private companies, which may not have the same level of transparency or creditworthiness as publicly traded firms.
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