First Brands Collapse Rattles Debt Investors

The auto parts supplier First Brands, known through its brands like STP oil (whose name stands for Scientifically Treated Petroleum), Prestone antifreeze and Simoniz car waxes, has filed for Chapter 11 bankruptcy protection, disclosing liabilities on 29 Sept 2025 exceeding $10 billion.  

This has come in the wake of creditors concern on the use of opaque off-balance-sheet financing (by keeping certain assets and liabilities off balance sheet, healthier financial metrics can be obtained).

First Brands are likely to disclose an issue with its factoring arrangements, factoring being a financing method tied to the future revenue of the company. The companies Board and creditors are investigating the issue.

Apollo Global Management (NYSE: APO), an asset-rich American asset management firm, due to publish Q3 results on November 4th, had a 1 year CDS on the debt of First Brands, paying out in the event of failure to make payments. This is a credit play, not an equity short per se, and only pays if First Brands suffers on its debt payments. The fact APO has maintained that position has been a signal to the market.

Greek-American investment manager Jim Chanos (short-seller of Enron - made money, short seller of Tesla - lost money) has slammed the "magical machine" of private credit in response.

Barclays Bank Shares Tumble 25% in Friday Trading, BoA drops 13.7% on Q4 Results

Barclays shares fell 25%, hours after the ban on short-selling was lifted. Speculation surrounds further credit writedowns at Barclays Capital (managed by this team). Are we heading for nationalisation of Barclays?

BoA reported 2008 full-year profit of $4.01 billion compared with net income of $14.98 billion for 2007. The full-year profit was greatly impacted by a Q4 loss of $1.79 billion. These results include Countrywide Financial, acquired 1 Jan 2009, but not Merrill Lynch. Bank of America this month raised $2.8 billion by selling under 15% of its shares in China’s second-largest bank, China Construction Bank.

According to their press release, Bank of America ended 2008 with a Tier 1 capital ratio of 9.15 percent. Additional capital from the Treasury will boost the company's Tier 1 capital ratio to approximately 10.70 percent, on a pro-forma basis. T1C is a Basel-measure, measuring the ratio of the bank's core equity capital to risk-weighted assets. The Basel accord specifies capital adequacy requirements for banks, "le contrôle bancaire".