Jefferies’ trade-finance fund parked $715 million in First Brands IOUs — then the supplier went bust

A Jefferies-controlled trade-finance fund loaded up on First Brands receivables — and now the auto-parts maker is in bankruptcy.

Point Bonita Capital, a unit inside Jefferies’ Leucadia Asset Management, put nearly a quarter of its $3 billion portfolio — about $715 million — into invoices owed by First Brands’ big-box customers such as Walmart and AutoZone. First Brands was responsible for steering those customer payments to Point Bonita, but the money stopped flowing on Sept. 15, Jefferies disclosed.

Jefferies said its own stakes tied to the mess total $161 million, a figure that includes what it bought in First Brands loans plus its investment in the Point Bonita vehicle. Leucadia itself holds $113 million of equity in that fund. Separately, Jefferies flagged another line of exposure via Apex Credit Partners — half owned by Jefferies — whose CLOs held about $48 million of First Brands loans.

The collapse of First Brands — maker of wiper blades and oil filters — came after a planned refinancing unraveled under investor scrutiny. It’s the latest black eye for the opaque trade-finance world, still haunted by the 2021 Greensill implosion that helped topple Credit Suisse. UBS-affiliated funds are staring at more than $500 million of First Brands exposure, according to court filings, underscoring how widely the pain is spread.

Bankruptcy papers suggest First Brands’ advisers are probing whether receivables were handed off to outside factors when cash came in — and if some were factored more than once. For Jefferies and other creditors, the answers will determine how much of those paper promises can be turned back into real money.

With input from Bloomberg, the Financial Times, and Reuters.