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UBS Faces $500M Exposure in First Brands Group Bankruptcy

UBS's exposure to First Brands Group's bankruptcy could reach $500 million. The Swiss banking giant is assessing the impact on clients and taking steps to mitigate risks.

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This looks like an edited image. I think these are the parts of a vehicle. I can see the letters,...
This looks like an edited image. I think these are the parts of a vehicle. I can see the letters, logo and design on the image.

UBS Faces $500M Exposure in First Brands Group Bankruptcy

UBS Group AG faces a significant exposure of over $500 million following the bankruptcy of auto-parts supplier First Brands Group. The Swiss banking giant is among several creditors, including Wall Street firms and hedge funds, involved in financing the now-bankrupt company.

First Brands Group, based in Texas, filed for Chapter 11 protection after failing to refinance its debts and facing creditor concerns over its off-balance-sheet financing practices. UBS Asset Management has secured claims totaling over $160 million, including holdings tied to term loans and a sidecar facility. Notably, UBS Hedge Fund Solutions is the largest unsecured creditor, with a claim of $233.7 million. Additionally, UBS's O'Connor hedge fund business has a claim of $116.1 million against First Brands Group.

UBS is currently assessing the potential impact on affected funds and working to safeguard the interests of its clients. Meanwhile, the bankruptcy court's committee is investigating First Brands' use of off-balance-sheet financing, which has raised concerns among creditors.

UBS Group AG's exposure to First Brands Group's bankruptcy highlights the risks faced by creditors in such situations. As the investigation into First Brands' financing practices continues, UBS is taking steps to mitigate the impact on its clients. The sale of UBS's O'Connor unit to Cantor Fitzgerald, expected to close in the fourth quarter, is one such measure aimed at managing the bank's portfolio.

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